Where would you turn if you had exhausted your federal financial aid and still did not have enough funding through scholarships and grants to help cover your college expenses? Private students loans, right? For most students that would be the logical next step, but it’s certainly not your only option. Over the last few years, peer-to-peer lending (also known as social lending) has increased in popularity. Why? It’s simple. Peer-to-peer loans typically offer lower interest rates and they often approve loans to those who may not qualify for traditional private student loans. There are basically two formats you can choose from: (1) framily (friends and family) loans and (2) stranger-to-stranger loans. Both have their advantages and disadvantages.
College is an expensive investment, so finding ways to increase your savings during the years leading up to it, as well as during it, is a must. There are traditional methods, such as 529 Plans and prepaid college savings accounts, which offer you the ability to make contributions over several years, but you shouldn’t limit your saving habits to these conventional options. You could actually be saving and earning money by completing everyday tasks. How? The answer is right in the palm of your hand. Your smartphone can unlock the door to a multitude of apps that can help you do everything from finding the cheapest gas to earning money while you shop for this week’s groceries. The rewards may seem small at first, but over time they can really add up. Here are just a few of the apps worth checking out.
Understanding the basic concept of variable vs. fixed rate student loans if fairly simple. A variable interest rate will change periodically over the term of the loan whereas a fixed rate will not. The questions many borrowers face is, “which is better?” Answering that question is more difficult than you might think–at first. Let’s take look at the pros and cons of each, so you can make an informed decision about which type to choose for your student loans.
Earlier this month, the Consumer Financial Protection Bureau (CFPB) released a report detailing the types of complaints it has received over the last three years. This not only included information about credit card and mortgage complaints, but also issues with private student loans. The majority of the complaints the CFPB received regarding private student loans involved problems with consumers repaying their debt. Nearly 46 percent of consumers cited issues with billing, fees or restructuring their loans, and another 22 percent had problems when they were unable to pay on time.
Since these are common complaints among student loan borrowers, I thought it might be a good time to address a question I often get on social media: “Where do you go if you have problems with your student loans?” Continue Reading…
Now that we are in peak borrowing season for private student loans, our customer service inbox is overflowing with your questions. One question in particular keeps popping up so we’re going to address it quickly here and try to save some postage.
A recent email asked, “My daughter needs to borrow $10,000 this year to finance her costs. Does she request $10,000 for just this year or $40,000 for all 4 years she will be in school?”
It might seem convenient or even cost-effective due to current low interest rates to finance an entire education up front. However, the student would still be accruing or paying interest on the full amount borrowed while in school. As you can imagine, the interest charges on $40,000 are much higher than on $10,000. Let’s take a quick look at how eligibility is determined to see how the borrowing process works.