Personal Finance Tips

Taking on debt can be daunting. But if you borrow intelligently – planning out how much you should borrow and your ability to pay it back – an education loan can be a smart investment in your future.

Borrow wisely and repay conscientiously

Borrow only what you need. Remember you can always take a smaller loan than what the lenders have to offer.

o Before borrowing, prepare an estimate of a year’s expenses for college

o A good approximation is that your education loan payment should not exceed 8-10% of your post-college anticipated income.

o If possible, shell out the accruing interest on your unsubsidized federal loans and private loans while you’re still in school.

o Be punctual with repayment! When you pay your education loans on time, you avoid late fees, protect your credit history, and prevent yourself from defaulting on your loan.

Prepare a budget

Budgeting is the foremost step to good money management.

o Set goals. Plan for expenses, like buying a car, in your budget.

o Create a “spending diary” to track every purchase you make.

o Always keep a note of income (what you earn) versus expenses (what you spend).

o Cut costs whenever possible. Buy used textbooks, cook at home rather than eat out, shop at sales, and use public transportation. A penny saved…

Avoid defaulting

Here are a few tips to keep you out of the red:

o Graduate. A college degree translates to a higher paying job and makes loan repayment much simpler.

o Inform your lender if you realize you can’t make a payment, and discuss your options.

o Clear other debts during the period after you leave school and before your first student loan payment is due.

o Make extra payments. You not only reduce your loan balance quicker, but also reduce the amount of interest you’ll have to pay.

Many college students are finding that they have many academic funding options ranging from federal loans to private loans. Each has its own advantages and benefits that set them apart from other financing institutions. If you do not know yet, Bank of America has not only established itself as one of the trusted banks in America it also boasts of reaching out to the needs of the prospective college students, particularly those who have dreams of graduating from college or university.

Bank of America has its own student loan division which focuses on addressing the financial needs of college students. They are known to provide valuable assistance needed to apply for student loans. Bank of America is said to offer education loans that are somewhat different from standard loans. It is best that you learn the various differences in detail in order to make an informed decision.

Bank of America Student Loans includes private loan packages. This option includes Education Maximizer Loan which is good for any student that has reasonable credit ratings. This loan package can be used for just about anything that is associated with the educational process. However as with any student loan you must be disciplined in your spending or you will end up out of money and needing another student loan.

Federally based Bank of America student loans are also available and are much in demand. The US Department of Education provides the loan to students that have met the academic and or credit rating requirements necessary to qualify. These loans can be applied for by either the student or the student’s parents. Public or federal loans generally have lower interest rates and more flexible terms.

Aside from private and federal loans, Bank of America Student Loans can either be certified or non-certified. Certification in this sense means that the loans have to be certified by your school. Examples of a certified loan from Bank of America are the Bank of America Private Loans and Bank of America TERI Loans. Non-certified loans from Bank of America include CampusEdge Student Loan and the Education Maximizer Loan.

In response to the growing number of students searching for student loans on the web, the Student Banking division of the Bank of America has established a website for use for students who are interested in filing student loan applications. The websites are helpful and are packed full of the necessary information on Bank of America Student Loans. You really need to go a good job of research on every student loan package you are considering. Once you have completed this exercise you most likely find that Bank of America student loans are a great way to fund your college education.

Your education is the most important investment you can make in yourself, and getting funding for your education is equally important. For many adults who’ve made a few bad decisions financially, bad credit student loans don’t enter the picture until they want to return to college. Can bad credit rating impact whether or not they can get student loans?

Education loans are traditionally one of the lowest interest rate financial services products out there, in part because of the Federal student loan programs and grants — when Pell grants give money away for free to needy students, and getting scholarships can take the edge off, charging an outrageous interest rate for student loans doesn’t make a lot of sense. Likewise, from the perspective of a lender, people with college degrees tend to double their lifetime income potential compared to those with just a high school diploma, so lending money to college students is a good risk to take.

The premier student loan program is the Stafford loan. The Stafford loan program assumes that the typical college student is fresh out of high school, and thus doesn’t have a credit rating yet. These loans don’t even check the students credit rating, they look at financial need more than anything else. Stafford loans are capped in the total loan amount, because they were intended to fill in the gaps for books and scholarships, not fund an education entirely. The only credit history that can disqualify you from a Stafford loan is defaulting on a previous government-backed student loan.

There is a second federal loan package, called the Perkins loan. Like the Stafford education loan, it’s an excellent bad credit student loan, because it assumes that the recipient has no credit rating at all, coming out of high school. It is particularly well suited to adults returning to complete their education, because of its higher limits. It does have a more volatile interest rate than the Stafford program, and has just enough differences in the application process to be frustrating.

For students whose credit rating is better than theirs, who are worried about bad credit, the PLUS loan program offers conventional business loans at competitive market driven rates to their parents. This option is used a lot for students entering college after a stint in the military, particularly if their military stint caused a bad credit problem.

The last source of bad credit student loans are private student loan vendors. These will make an unsecured educational loan at interest rates that are generally higher than the three federal loan programs. Keep these in reserve as an emergency loan to fill out a semester’s payments; they have a shorter application cycle than any of the federal loans. Or, better yet, work on getting some scholarship and grant support, which is like a student loan that doesn’t have to be paid back if you meet certain academic requirements.

There are many reasons to obtain education loans for online courses if you are interested in obtaining a degree or a certificate. These reasons to get government loans for school include your finances, time, and they are government loans.

Student loans for online courses can be from the government or through a private lender. It is always best to obtain government loans for schooling. The government is the best route to go because they are not private loans. Private loans affect your credit and they are not treated as government loans. The government offers everyone that is a citizen the right to go to school and attend college courses to work toward a degree program. The loan maximum value each person is entitled to is $140,000 in a lifetime. This amount of money can help pay for a bachelor’s degree, masters program, and even a doctorate. Certificates can also qualify for government loans.

Education loans for online courses from the government are beneficial because they give you breathing room with your finances. If you are trying to go to school and pay for it on your own then it can be very expensive. If you don’t pay your study course tuition then you will be kicked out of a class or you will not get credit. College is so expensive many people do not further their education because they think they will never be able to afford it. This is not the case. Government loans not only give you money to pay for attending the classes, but the loans also include additional money to help you live. The money will be dispersed to the school and the remaining balance each quarter will be given to you to help you with your living expenses. This is because the government expects people to work and make less money while they are going to college courses.

Time is a very big benefit when you obtain student loans from the government. The government recognizes that you need to focus on your education to get a good job to start a career. They do not require you to pay on your student loans until you have completed your degree program. In addition, the government gives you six months after you have graduated to find a job and begin paying on your loans. If you are in a bad financial situation, the government allows for people to defer their repayment for up to three years. A private loan for college would never offer the benefits or work with you financially on your student loans.

Education loans for online courses are very beneficial when you cannot afford to go back to school and earn a degree. The government loans are the only route to go because private lenders do not offer benefits and they may not even wait for you to complete your degree program. Government student loans are available for everyone. Just be sure you complete your degree program and you do not drop out of school.

So, you are going to college or another institute of higher learning? If you are smart, you have already done your FAFSA or Free Application for Federal Student Aid. There are some sources of aid, such as grants and scholarships, which are a limited resource and the early birds are going to have first bite at those particular worms. The FAFSA is the key to these and the loans which are available under the Federal Government’s programs.

Many of the Federal student loans from the FAFSA or are funded by private companies, such as Sallie Mae (not a government organization at all as many think), Wells Fargo, College Loan Corporation, etc. These are lenders under the FFEL or Federal Family Education Loan program.

Many of you will have no choice as to who your lender is. Your school may work with the Federal Government’s DIRECT program which means the loan is directly from the government. There is no confusion in that case, however you may miss out on some of the bonuses that the private companies working with the FFEL program offer, such as discounted interest rates.

Others will find that their school has a “preferred lender”, and you have no choice in who their student lender is. This may be for the school’s benefit, as their process is streamlined, or maybe there was an incentive from the lender for the school using only that company.

The rest of you are going to be bombarded with choices. In most cases you will end up phoning the numbers in the mailers and speaking to a student loan officer.

I used to work for one of the bigger student loan companies. When you try to get a FAFSA based loan for college and university, you will be pitched in a very particular way.

I am going to let you in on how they sell these loans to you.

The education loan consolidation and Plus / Stafford loan pitches that you will find at the consumer resource FAFSA Loan will let you be prepared to deal on equal terms with the education financial aid industry.

There is nothing underhanded, but you do want to be prepared so that you make the decision which is best for you, not for the student loan officer. These people are paid on a commission basis.

PLUS Loans and Stafford Loans

On the PLUS Loan and Stafford Loan Script page you will find an explanation of the pitch I used for Federal education loans for when the student was still at school. Two of the things that were drummed into us was to convey a sense of urgency, and also that this was a FEDERAL GOVERNMENT program. We weren’t told to make anyone think that we were the government, but if they did, it certainly couldn’t hurt.

Note that Stafford loans are sometimes referred to as an unsubsidized student loan or a subsidized student loan.

Consolidation Loans

Once you have finished school you may want to consolidate your student loans. At this point you may have the opportunity to contact the lending companies again. And don’t worry, they will be contacting you, too!

On the Consolidating FAFSA Loans page you will find the a summary of the script that a lender will use to convince you to consolidate. Again the modus operandi was to convey a sense of urgency, and also that this was a FEDERAL GOVERNMENT program.

Remember that there are deadlines for these loans but they are usually based on publicly known dates such as school dates and interest rate changes by the Federal Government. If a lender tries to tell you to get your application in within three weeks or “your file will be closed”, don’t worry. The “file” can be opened again real easy!

All the best in your education, and don’t hesitate to contact us if you have any questions or comments.