There’s been big news in the student loan-isphere this week, ladies and gents. According to Forbes.com, there are a lot of changes happening with student loan lenders. The number of lenders has been skyrocketing due to the introduction of student loan refinancing a few years back, and the increase in lenders has lead to an increase in options. Borrowers now have more options when it comes to repayment, eligibility for loans, forbearance, and deferment than ever before.
Taking out student loans is the easy part, relatively speaking. It’s paying them back that’s tricky. I know when I first started my repayment, I barely knew what all the terms meant, let alone that there were several repayment options available to choose from. So what are the available student loan repayment plans, and which is the best one for you?
For those of us with student loans, the repayment period can be beyond stressful. With interest rates ranging from 4% to 7% federally, and sometimes higher with private student loans, it’s no wonder, really. And for those barely making the ends meet to scrape out the minimum payments, it can be infuriating.
There is a lot of confusion around student loans. Some students swear that they will never take out a loan, while others cannot wait for the “free paycheck” to upgrade their computer and go to the party school of their dreams.
Student loans are not the financial devil, nor are they a free-ride. Take a look at these four common myths to make sure your student loans are helping you, not hurting you.
With the rising cost of college tuition, more students are turning to private student loans to help bridge the gap between what is offered through financial aid and what they can pay out of pocket and their actual college costs.. Unfortunately, most young people have a limited credit and employment history, which means they will be unable to secure a private student loan on their own. In general, most lenders require students to have a credit-worthy cosigner before they will be approved for financing. This person doesn’t necessarily need to be related to the borrower (student), but parents and other family members often step up to help out. But, being a cosigner can be risky. If the borrower fails to make payments, the cosigner will be legally obligated to repay the debt. There may even be some risk for the borrower, as well. For example, should the cosigner die or file for bankruptcy before the loan is paid in full, the student loan servicer may place the loan in default and demand that the balance be paid in full, even if all payments have been made on time. Plus, removing a cosigner from a private student loan is not always an easy process. There are two primary ways a cosigner can be freed of their obligations under the promissory note they signed: