Monday, 26 October 2015

Student loan | $6,000 payments against student loan reduces debt by $700 / Boing ...

Student loan | $6,000 payments against <b>student loan</b> reduces debt by $700 / Boing <b>...</b>

$6,000 payments against <b>student loan</b> reduces debt by $700 / Boing <b>...</b>

Posted: 26 Oct 2015 09:48 AM PDT

$6,000 payments against student loan reduces debt by $700 / Boing Boing

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Mark Frauenfelder

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9:48 am MonOct 26, 2015

debt

Bill Boegeman racked up a student loan debit of $82,961.02 to get a B.S. in social studies education from Minnesota State University, Mankato. It's going to take a very long time to pay it off.

Here's the part that really makes me mad: For 12 months, I have been making student loan payments of just over $500 a month. That means that over the course of a year, I put about a $6,000 dent into my student loan debt, or so I thought. On Oct. 17, 2015, a year to the day after I began paying off my loans, my total student loan debt was …

$82,264.27

If you don't have a calculator handy, that adds up to just under $700 less than I owed a year ago— $700 out of the $6,000 I put in that actually went toward reducing my debt. That's about 11 percent of the total amount paid, just enough to reduce my total debt by almost 1 percent.

Where did the other 89 percent ($5,300) go? Interest.

How to Buy a House when you Have <b>Student Loan</b> Debt | Refinance <b>...</b>

Posted: 18 Jun 2014 07:14 AM PDT

Are you trying to pay off student loans, but want to buy a home? Before you start the homebuying process, make sure to follow these first time home buyer tips that can limit headaches during any home purchase.

1) Fix or Improve your Credit Score (FICO Score)

  • One way to do this, on top of paying your bills on time, is to keep your credit card balances at or below the 30% threshold of the max available credit.  This can potentially save a buyer thousands of dollars over the life of the loan. Higher credit scores would typically give you better interest rates.
  • Avoid quick fixes. Do not close existing credit accounts if you do not use them.  Also, do not pay all of your card balances to zero at once, unless you can do this every month; any change can be viewed as a quick fix.  (In general, you do not want to change the way you utilize your credit.) Quick fixes can negatively impair your credit.  In the months leading up to a home purchase, keep paying your bills as you usually do; do not close any old credit lines and try to avoid opening up any new ones.
  • Maintain Healthy Debt – If you don't have a substantial credit history, lenders might not have enough data to approve you for a loan. Maintaining healthy debt and being a responsible borrower can help you avoid being labeled as a "thin file".
  • To obtain your credit score, you can request a FREE Annual Credit Report here. Make sure your credit report is accurate and up-to-date. If you have suspicious or dated transactions listed on your credit report, one option is to hire a credit repair agency to send legal verification letters on your behalf.

2) Decrease Your Debt-to-Income (DTI) Ratio

As with student loan refinancing, a mortgage lender will calculate your Debt-to-Income ratio to determine your ability to make monthly payments on the new mortgage. Typically, the maximum threshold in 2014 for acceptable DTI is roughly 43%. Special government programs and lenders might approve borrowers with higher DTI ratios, depending on a variety of underwriting criteria.

The easiest way to improve your DTI ratio, although not that easy for most borrowers, is by increasing your income. Are you due for a raise at work? Can you take on additional freelance work? If so, try to increase your monthly income several months before obtaining your pre-approval letter.

Depending on your student loan situation, you might be able to refinance or consolidate your student loans to obtain a lower monthly payment. Also, you can enroll Federal Student Loans into an Income Based Repayment Program which can drastically improve your DTI as well.

3) Get Pre-Approved to gauge your Home Buying Power

By getting pre-approved by a lender, you'll learn what the costs and down payment requirements are. To determine what you can qualify for, a lender would look at your 2 year employment history, credit (FICO), income, and assets.

Keep in mind:

  • A lender must look at most aspects of your financial history, at least in short term.  All funds need to be sourced and explained; any large deposits outside of normal payroll will be closely scrutinized.
  • Gifts from family are usual for first time homebuyers.  These, too need to be sourced and accompanied by a lender's gift letter.
  • Always check with the lender that you are giving all documents needed for a comprehensive decision on your preapproval.
  • A list of documents needed would include 2 years of W-2s, 2 years of federal tax returns, 30 days' worth of pay stubs, 2 months of asset statements.
  • More documents may be needed once the loan is underwritten.  A lender will require all pages of tax returns and bank statements.

There are many federal and private programs geared towards first-time home buyers with minimal down payment requirements, as well as expanded guidelines that enable those who may think they can't afford a home to do just that.  To best figure out what your home buying capabilities are, contact a lending professional and discuss your financial situation.

When you're ready to check out mortgage rates, you can get a fast and free rate quote from Quicken Loans by clicking here.

Brendon Fray is a Senior Mortgage Banker with Darien Rowayton Bank of Darien Connecticut. Brendon has the ability to lend mortgages in most states and can be contacted at: 203-669-4148 or bfray@drb-mtg.com.

Here are the top 6 lenders of 2015!

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1.90% - 7.25%

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1.90% - 7.24%

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2.35% - 8.89%1

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Check out the testimonials and our in-depth reviews!

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How to Get Off on the Right Foot Repaying Your <b>Student Loans</b> <b>...</b>

Posted: 25 Oct 2015 09:01 PM PDT

Repayment on the most common student loans (federal Stafford loans) starts six months after the borrower graduates. So, if like most new college grads, you donned a cap and gown in May of this year, it's about time to pay up.

Paying off student loan debt can be intimidating, but there are many things you can do to reduce the stress of the situation.

1. Connect With Your Lender

The first thing you need to do is figure out how much you need to pay and when that first payment is due. Between now and then, get yourself organized, but make sure you don't miss that first payment.

When you borrowed the money, your student loan servicer would have contacted you, and you've probably been receiving mail from them ever since. If you're unsure who has your loan, you can look it up in the National Student Loan Data System.

Once you know who you'll have to pay, set up your online account with the servicer. The student loan servicer's website is where you'll most likely manage everything having to do with your loan, including making payments, reviewing statements, communicating with servicer representatives and requesting any changes to your account.

Get familiar with your servicer and its website. You'll be making payments on these loans for the next several years, and while it's possible your student loan servicer will change, you need to know where to go if you ever have questions about your loans.

Check Credit Before Paying Down Student LoansCheck Credit Before Paying Down Student LoansGet your free Credit Score & personalized Action Plan. See where you stand & learn ways to better manage your score before paying down your student loans. Free and updated every 30 days.
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2. Make a Budget

Once you've looked up your loan information, you should know what your monthly payment will be. You need to make your student loan payments in order to keep the account and your credit in good standing, so it should be a top priority when determining your budget.

You can very rarely discharge student loan debt in bankruptcy, so if you fall behind, it takes a lot of work to catch up. If you default on your federal student loans, the government can garnish your wages and seize your tax refund, not to mention the debt collectors you'll have to deal with. Get in the habit of making your loan payments on time every month from the very beginning, and regularly check your credit score to see how your loans affect your credit (you can get two credit scores for free every 30 days on Credit.com).

3. Research Repayment Options

If you're crunching the numbers and you can't figure out a way to afford the monthly payments, immediately reach out to your student loan servicer. With federal loans, most borrowers can set up a monthly payment based on their income with pay-as-you-earn or income-based repayment plans. Some private student lenders also have options for adjusting payments, so if you're not sure about your options, ask.

Depending on your loans and your career path, you may also qualify for student loan forgiveness. You might even have a student loan repayment assistance program through your employer. Take advantage of whatever help might be available to you.

There are many resources available to borrowers to guide you through communicating with your loan servicer and understanding options available, like the Consumer Financial Protection Bureau's loan repayment tip sheet.

4. Commit to a Plan

Put a reminders in your calendar so you know when a loan payment is coming up. Make sure you've budgeted for the loan payment, and send the money on time. To make matters easier, you can set up a recurring automatic payment so you don't have to worry about getting checks in the mail on time or accidentally missing a due date. Your servicer might even lower your interest rate if you sign up for the automatic payment.

Take the time each month to make sure your payments go through (and that you have enough money in your bank account to cover them), and if your financial circumstances change, make sure you're doing everything you can to keep your loan accounts in good standing. Sometimes, figuring out that first payment is the hardest part, but once you get in the habit of it, paying off your student loan debt may not be so bad after all.

More on Student Loans:

Image: iStock

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Christine DiGangi covers personal finance for Credit.com. Previously, she managed communications for the Society of Professional Journalists, served as a copy editor of The New York Times News Service and worked as a reporter for the Oregonian and the News & Record. More by Christine DiGangi

How Much Do I Owe in <b>Student Loans</b>? - <b>Student Loan</b> Hero

Posted: 26 Oct 2015 08:35 AM PDT

So, you've graduated from college. Congratulations! Now it's time to start paying back your student loans and to chip away at the $1.2 trillion in student loan debt shared among Americans.

Before you begin the repayment process, however, you should answer a few important questions—for example, how much do you owe in student loans? And to which business or businesses do you owe that money?

Here are some tips for tracking down the answers that you need.

How Much Do I Owe in Federal Student Loans?

Learning how much you owe in federal loan repayment is easy. The National Student Loan Data System (NSLDS) , a database managed by the Department of Education (DOE), shows you everything that you need to know about how much you owe federal student aid and loans.

The NSLDS collects data from schools, guaranty agencies, loan programs, and other DOE programs so that students can investigate ways to pay for college and easily access other loan- and grant-related information.

When you're ready to repay your loans, use the NSLDS to find information about your loan's original amount, balance, servicing group, interest, and payment status.

All that you need to access the NSLDS is:

1. Your Social Security number;

2. The first two letters of your last name;

3. Your date of birth; and

4. The PIN you used to complete FAFSA financial aid forms—with any luck, you've kept your FAFSA login information.

The database will give you a ballpark figure on how much you owe in student loans. However, balances can be up to 120 days old, so you should confirm figures by contacting whichever business services your loans.

Perhaps one of the greatest benefits of the NSLDS is that it's "99 percent accurate," according to student loan attorney Joshua Cohen.

Yet, the database also poses two major limitations. It reports data about your federal student loans only, not your private loans, and it doesn't report data about older loans—for example, ones borrowed in the 1980s.

How Much Do I Owe in Private Student Loans?

Retrieving balances on private loans is a little trickier than finding information on federal loans, namely for two reasons. One, no national database for private student loans exists. Two, the financial institution that originally issued the loan may outsource loan servicing to another group, a secondary market encompassing private education, or a state group that buys, sells, and services student loans.

But don't worry. There are still relatively easy ways that you can find your private loan balances. Read on.

Why Do Financial Institutions Sell Loans?

First, let's start with some background.

Lending groups are in the business of finding customers and selling loans. They are not in the business of servicing those loans for decades on end. So, after you graduate and start repaying, a lending institution might sell that loan to a servicing and collecting business.

No matter what business services your loan or collects your debt, the original terms of your loan apply. Lenders must send you a letter notifying you of the loan's sale, and the new owners should send you information on why the loan was sold and how to make future payments.

You can make the transition smoother by taking the following steps.

  • Read and keep all mail from your original and eventual lenders.
  • Update your address in lender files. Since graduates tend to move often in the first few years after graduating, make sure that you contact the lender each time that you move.
  • Make sure that your direct payment information is accurate.

How to Find the New Lender

If you've forgotten (or never bothered to find out) what business owns your student debt, then try these ways to locate the new lender.

Ask Your Original Lender: Your original lender is always the best place to begin this search. Hopefully, you've kept your original loan documents with the lender's contact information. One call should help you to find out what business currently owns your loan.

Consult Credit Reports: Credit reports typically include contact information for creditors such as your new loan servicer. Of course, lending institutions often don't report debt to every credit agency, so it's best to check all three major credit groups: Experian, TransUnion, and Equifax. You can get a free report from each of these three agencies once a year by visiting annualcreditreport.com.

Ask Your School for Help: If you've had trouble with tracking down all of your loans, then talk to your university's financial aid administrator, who can help you to identify which business currently owns your loans.

How to Pay Off Student Loans

Once you figure out how much you owe, it's time to pay off your debt as efficiently as possible. Since you might have missed that course in college, here are some steps that you can take to overcome debt before you're ready to retire.

1. Pay off private student loans first, because interest rates on those loans can eventually climb and exceed your monthly budget.

2. Put at least 10% of your monthly gross income toward your student debt, instead of paying only the minimum balance. That way, you'll pay off the debt sooner and pay less in interest, while saving space in your budget for other financial goals such as buying a home, saving for retirement, or building an emergency fund.

3. Ask your employer to pay off your loans. Though it sounds far-fetched, some companies may start helping loyal employees to reduce or erase their student loans in lieu of larger salaries. Recently proposed legislation in Colorado would give employers tax credits if they give qualified workers up to $10,000 per year to pay off their student loans.

4. Make automatic payments. Many lenders actually charge a slightly lower interest rate if you allow them to automatically deduct payments from your bank account each month.

Do you have any questions about how to find out how much you owe in student loans? Let us know below!

Here are the top 6 lenders of 2015!

Lender

Rates (APR)

Eligible Degrees

  

1.90% - 7.25%

Undergrad & Graduate

 Learn More

1.90% - 7.24%

Undergrad & Graduate

 Learn More

2.35% - 8.89%1

Undergrad & Graduate

 Learn More

1.90% - 6.93%

Undergrad & Graduate

 Learn More

1.90% - 6.25%

Undergrad & Graduate

 Learn More

1.93% - 6.14%

Undergrad & Graduate

 Learn More
Check out the testimonials and our in-depth reviews!

Check out our in-depth reviews!

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