Personal loans that are designed specifically for bad credit situations provide many benefits for consumers who find themselves within the gap of poor or bad credit. Not only do they provide those consumers the funds they need when traditional lenders have turned them down, but they also help to resolve consumers’ money problems by providing them chance to restore their credit.
Many lenders understand the circumstances that can produce bad credit and are now offering a variety of personal loans that are designed to complement such situations. Consumers who find themselves with bad credit can usually apply for two different kinds of personal loans. Secured personal loans carry a lower interest rate because they are secured with collateral. Unsecured personal loans do not require any type of collateral for approval, although they may carry a slightly higher interest rate.
Regardless of the specific circumstances that resulted in bad credit, consumers can now take advantage of the opportunity to apply for a personal loan without facing rejection because of their credit profile. Through well-designed personal credit loans, consumers can also take advantage of the opportunity to improve their credit.
The most important aspect of applying for a personal loan is to find the right lenders. Consumers can now do this more easily by visiting PersonalCreditServices.com, a website that matches customers with the right lenders and assists them with the process of applying for a loan.
source:http://www.prlog.org/10087382-personal-loan-options-are-available-for-consumers-with-bad-credit.html
Saturday, July 12, 2008
Sunday, June 8, 2008
Credit problems might affect some types of student loans
College students and parents are scrambling to line up student loans for the fall amid fears the credit crisis might put the squeeze on such lending.
How bad could it be? That depends on what kind of loan you’re looking for.
Late last month, the Bush administration took a big step toward heading off problems with federally guaranteed student loans made by banks and other private-sector lenders. Using authority recently granted by Congress, the federal government plans to purchase and invest in such loans, freeing capital so lenders can make new loans.
But this initiative — which will last only one school year — isn’t a fix-all for a loan market that is hard to sort out even in the best of economic times. For instance, loans not backed by the government still could be in short supply.
Here is a guide to the different kinds of student loans:
The federal government is the biggest participant in the market, having made or guaranteed $109.4 billion in student loans during the 2007-08 school year. The debt includes Stafford loans for undergraduates, PLUS loans for parents and graduate students, and consolidation loans for graduates who want to combine and refinance previous loans.
Borrowers get these loans through one of two channels.
Under the “direct loan” program — which accounted for about 16 percent of federal student loans this school year — students and families borrow directly from the government, with colleges doing some initial paperwork.
The catch is that your college has to participate in the direct-loan program. About 1,050 schools are active direct-loan schools.
The direct-loan program hasn’t been in jeopardy during the credit crunch.
The concerns have revolved around the government’s other lending channel, the Federal Family Education Loan program, or FFEL, which is used by about 4,500 schools.
Under the FFEL program, banks and other private-sector lenders make loans, and the government guarantees up to 97 percent of their value, so a lender takes on little risk if a borrower defaults. To encourage lenders to take part, the government also pays them a subsidy on each loan.
Those subsidies have been one source of trouble. Last fall, Congress cut them roughly in half in the aftermath of ethics scandals.
While their profits from subsidies were clipped, lenders faced problems on another front. Most FFEL lenders package some or all of their student loans into securities they sell to investors, which generates cash they can use to make more loans.
In normal economic times, those asset-backed securities, or ABSs, seemed like a good investment bet. But in recent years, lenders also have been marketing ABSs containing subprime mortgages made to borrowers with poor credit histories. As that market collapsed, investors began backing away from all kinds of ABSs, including those containing FFEL loans.
SLM Corp., known as Sallie Mae, the nation’s largest student lender, was threatening to pull out of FFEL but opted to remain after the Bush administration unveiled its liquidity plan May 20.
The biggest area of concern for the fall is alternative student loans, which don’t involve the federal government and are strictly between borrowers and lenders.
Though they typically involve higher rates and fewer protections, alternative loans have taken off as lending limits on some federal loan programs have failed to keep up with college costs.
Source:http://www.kansascity.com/business/story/653525.html
How bad could it be? That depends on what kind of loan you’re looking for.
Late last month, the Bush administration took a big step toward heading off problems with federally guaranteed student loans made by banks and other private-sector lenders. Using authority recently granted by Congress, the federal government plans to purchase and invest in such loans, freeing capital so lenders can make new loans.
But this initiative — which will last only one school year — isn’t a fix-all for a loan market that is hard to sort out even in the best of economic times. For instance, loans not backed by the government still could be in short supply.
Here is a guide to the different kinds of student loans:
The federal government is the biggest participant in the market, having made or guaranteed $109.4 billion in student loans during the 2007-08 school year. The debt includes Stafford loans for undergraduates, PLUS loans for parents and graduate students, and consolidation loans for graduates who want to combine and refinance previous loans.
Borrowers get these loans through one of two channels.
Under the “direct loan” program — which accounted for about 16 percent of federal student loans this school year — students and families borrow directly from the government, with colleges doing some initial paperwork.
The catch is that your college has to participate in the direct-loan program. About 1,050 schools are active direct-loan schools.
The direct-loan program hasn’t been in jeopardy during the credit crunch.
The concerns have revolved around the government’s other lending channel, the Federal Family Education Loan program, or FFEL, which is used by about 4,500 schools.
Under the FFEL program, banks and other private-sector lenders make loans, and the government guarantees up to 97 percent of their value, so a lender takes on little risk if a borrower defaults. To encourage lenders to take part, the government also pays them a subsidy on each loan.
Those subsidies have been one source of trouble. Last fall, Congress cut them roughly in half in the aftermath of ethics scandals.
While their profits from subsidies were clipped, lenders faced problems on another front. Most FFEL lenders package some or all of their student loans into securities they sell to investors, which generates cash they can use to make more loans.
In normal economic times, those asset-backed securities, or ABSs, seemed like a good investment bet. But in recent years, lenders also have been marketing ABSs containing subprime mortgages made to borrowers with poor credit histories. As that market collapsed, investors began backing away from all kinds of ABSs, including those containing FFEL loans.
SLM Corp., known as Sallie Mae, the nation’s largest student lender, was threatening to pull out of FFEL but opted to remain after the Bush administration unveiled its liquidity plan May 20.
The biggest area of concern for the fall is alternative student loans, which don’t involve the federal government and are strictly between borrowers and lenders.
Though they typically involve higher rates and fewer protections, alternative loans have taken off as lending limits on some federal loan programs have failed to keep up with college costs.
Source:http://www.kansascity.com/business/story/653525.html
Sunday, April 27, 2008
Student Loan Consolidation
Student Loan Consolidation, also called a Student Consolidation Loan, combines several student or parent loans into one bigger loan from a single lender, which is then used to pay off the balances on the other loans. Consolidation loans are available for most federal loans, including FFELP (Stafford, PLUS and SLS), FISL, Perkins, Health Professional Student Loans, NSL, HEAL, Guaranteed Student Loans and Direct loans. Some lenders offer consolidation loans for private loans as well.
How It Works
Consolidation loans often reduce the size of the monthly payment by extending the term of the loan beyond the 10-year repayment plan that is standard with federal loans. Depending on the loan amount, the term of the loan can be extended from 12 to 30 years. (10 years for less than $7,500; 12 years for $7,500 to $10,000; 15 years for $10,000 to $20,000; 20 years for $20,000 to $40,000; 25 years for $40,000 to $60,000; and 30 years for $60,000 and above.) The reduced monthly payment may make the loan easier to repay for some borrowers. However, by extending the term of a loan the total amount of interest paid is increased.
In certain circumstances (for example, when one or more of the loans was being repaid in less than 10 years because of minimum payment requirements), a consolidation loan may decrease the monthly payment without extending the overall loan term beyond 10 years. In effect, the shorter-term loan is being extended to 10 years. The total amount of interest paid will increase unless you continue to make the same monthly payment as before, in which case the total amount of interest paid will decrease.
The interest rate on consolidation loans is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest 1/8 of a percent and capped at 8.25%.
If a student consolidates their loans before they enter repayment, the interest rate used is the lower in-school interest rate. Thus, although the rounding up of the weighted average can potentially cost the student as much as 0.12%, a student who consolidates before entering repayment can save as much as 0.6%, a substantial net savings. (The in-school interest rate is 1.7% plus the 91-day treasury bill rate from the last auction in May. During repayment, the interest rate is the 91-day T-bill rate plus 2.3%.) This loophole has been confirmed by an excerpt from the Federal Register and direct correspondence with the US Department of Education. Additional details can be found in the interest rate loophole section.
Some graduate students have found it necessary to consolidate their educational loans when applying for a mortgage on a house.
To find out more about Student Loan Consolidation, check with your lender.
Alternatives
Consolidation simplifies the repayment process but does involve a slight increase in the interest rate. Students who are having trouble making their payments should consider some of the alternate repayment terms provided for federal loans. Income contingent payments, for example, are adjusted to compensate for a lower monthly income. Graduated repayment provides lower payments during the first two years after graduation. Extended repayment allows you to extend the term of the loan without consolidation. Although each of these options increases the total amount of interest paid, the increase is less than that caused by consolidation.
Source:http://chinese-school.netfirms.com/business-article-student-loan-consolidation.html
How It Works
Consolidation loans often reduce the size of the monthly payment by extending the term of the loan beyond the 10-year repayment plan that is standard with federal loans. Depending on the loan amount, the term of the loan can be extended from 12 to 30 years. (10 years for less than $7,500; 12 years for $7,500 to $10,000; 15 years for $10,000 to $20,000; 20 years for $20,000 to $40,000; 25 years for $40,000 to $60,000; and 30 years for $60,000 and above.) The reduced monthly payment may make the loan easier to repay for some borrowers. However, by extending the term of a loan the total amount of interest paid is increased.
In certain circumstances (for example, when one or more of the loans was being repaid in less than 10 years because of minimum payment requirements), a consolidation loan may decrease the monthly payment without extending the overall loan term beyond 10 years. In effect, the shorter-term loan is being extended to 10 years. The total amount of interest paid will increase unless you continue to make the same monthly payment as before, in which case the total amount of interest paid will decrease.
The interest rate on consolidation loans is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest 1/8 of a percent and capped at 8.25%.
If a student consolidates their loans before they enter repayment, the interest rate used is the lower in-school interest rate. Thus, although the rounding up of the weighted average can potentially cost the student as much as 0.12%, a student who consolidates before entering repayment can save as much as 0.6%, a substantial net savings. (The in-school interest rate is 1.7% plus the 91-day treasury bill rate from the last auction in May. During repayment, the interest rate is the 91-day T-bill rate plus 2.3%.) This loophole has been confirmed by an excerpt from the Federal Register and direct correspondence with the US Department of Education. Additional details can be found in the interest rate loophole section.
Some graduate students have found it necessary to consolidate their educational loans when applying for a mortgage on a house.
To find out more about Student Loan Consolidation, check with your lender.
Alternatives
Consolidation simplifies the repayment process but does involve a slight increase in the interest rate. Students who are having trouble making their payments should consider some of the alternate repayment terms provided for federal loans. Income contingent payments, for example, are adjusted to compensate for a lower monthly income. Graduated repayment provides lower payments during the first two years after graduation. Extended repayment allows you to extend the term of the loan without consolidation. Although each of these options increases the total amount of interest paid, the increase is less than that caused by consolidation.
Source:http://chinese-school.netfirms.com/business-article-student-loan-consolidation.html
Sunday, March 16, 2008
Sub-prime crisis hit municipal bonds, student loans
The financial hurricane tearing through Wall Street has sparked vast losses at major banks, but it has also exposed a formerly secretive corner of America's financial markets.
Millions of Americans track the Dow Jones Industrial Average and their stock portfolios on a daily basis, but the trillion-dollar trade in mortgage-backed securities, corporate and municipal bonds and other complex securities is mostly hidden and closed to amateur investors.
Mounting losses on mortgage securities have affected other complex debt instruments and deepened a credit crunch that has reverberated around the world.
Banks in New York, London and Zurich are trying to offload their exposure to such securities, but the opaque nature of a market where trades occur between banks rather than on an open exchange appears to have scared off buyers in the current uncertain climate.
"The subprime problem spread to the banks and from the banks it has now spread to the credit markets and it has become a vicious cycle," said John Praveen, the chief investment strategist for Prudential International Investment Advisers, LLC.
The credit squeeze was triggered by a sharp rise in subprime mortgage defaults, or home loans granted to Americans with poor credit, because banks had bundled and resold subprime loans to other parties.
The angst worsened Friday as Bear Stearns, a large US investment bank, said it had obtained an emergency loan from the Federal Reserve Bank of New York through rival bank JPMorgan Chase.
Bear Stearns chief executive Alan Schwartz said the bank's liquidity had "signficantly deteriorated" in just 24 hours as it battled to stem losses linked to mortgage-backed securities.
Cracks first began appearing in the credit markets in mid-2007 when financial firms revealed they were slashing the value of their mortgage portfolios due to the US housing slump.
The resulting losses forced some of America's biggest banks to restrict fresh lending and demand collateral from borrowers as they sought to preserve cash.
Debt became toxic and cash became king as the banks turned off lending spigots that had fueled a boom in corporate mergers and acquisitions.
The liquidity squeeze has deepened in recent months as private-equity firms and hedge funds, which had borrowed heavily, sought to sell investments, but struggled to find purchasers.
An affiliate of the Carlyle Group, a giant US private equity firm, defaulted on almost 17 billion dollars of debt on Thursday and several small hedge funds have collapsed in recent weeks.
US President George W. Bush and the Federal Reserve have backed various measures, including sustained interest rate cuts, to ease the credit crunch, but it shows no sign of abating.
Treasury Secretary Henry Paulson, Fed chairman Ben Bernanke and Securities and Exchange Commission (SEC) chairman Christopher Cox urged banks, credit rating agencies and mortgage firms, to overhaul their practices Thursday.
The financial chiefs endorsed a range of recommendations aimed at boosting business transparency and restoring confidence in America's battered financial markets.
The intensifying credit turmoil is threatening some public works projects and is making it harder for firms to get business loans and for students to obtain loans for university courses.
The director of the SEC's division of trading and markets, Erik Sirri, told Congress last week that the contagion had spread to municipal bond auctions.
"There is no question that the recent dislocations in the municipal bond markets have created unanticipated hardships for municipal issuers and in some cases dramatically increased their borrowing costs," Sirri said.
If US cities and states cannot sell municipal bonds to investors it could threaten plans to build new roads, schools, airports and other public works projects.
The state of Michigan has temporarily suspended a student loan program called MI-LOAN citing "the current and unprecedented capital markets dislocation."
Veteran money managers say the escalating credit crisis is one of the worst they have witnessed in recent decades and could push the economy into a recession.
Praveen said economic growth will likely rebound in the third quarter due to a 168-billion-dollar government economic stimulus package, but he said consumers will need to keep spending to keep the economy on its legs.
source:http://www.lankabusinessonline.com/fullstory.php?newsID=1061095213&no_view=1&SEARCH_TERM=35
Millions of Americans track the Dow Jones Industrial Average and their stock portfolios on a daily basis, but the trillion-dollar trade in mortgage-backed securities, corporate and municipal bonds and other complex securities is mostly hidden and closed to amateur investors.
Mounting losses on mortgage securities have affected other complex debt instruments and deepened a credit crunch that has reverberated around the world.
Banks in New York, London and Zurich are trying to offload their exposure to such securities, but the opaque nature of a market where trades occur between banks rather than on an open exchange appears to have scared off buyers in the current uncertain climate.
"The subprime problem spread to the banks and from the banks it has now spread to the credit markets and it has become a vicious cycle," said John Praveen, the chief investment strategist for Prudential International Investment Advisers, LLC.
The credit squeeze was triggered by a sharp rise in subprime mortgage defaults, or home loans granted to Americans with poor credit, because banks had bundled and resold subprime loans to other parties.
The angst worsened Friday as Bear Stearns, a large US investment bank, said it had obtained an emergency loan from the Federal Reserve Bank of New York through rival bank JPMorgan Chase.
Bear Stearns chief executive Alan Schwartz said the bank's liquidity had "signficantly deteriorated" in just 24 hours as it battled to stem losses linked to mortgage-backed securities.
Cracks first began appearing in the credit markets in mid-2007 when financial firms revealed they were slashing the value of their mortgage portfolios due to the US housing slump.
The resulting losses forced some of America's biggest banks to restrict fresh lending and demand collateral from borrowers as they sought to preserve cash.
Debt became toxic and cash became king as the banks turned off lending spigots that had fueled a boom in corporate mergers and acquisitions.
The liquidity squeeze has deepened in recent months as private-equity firms and hedge funds, which had borrowed heavily, sought to sell investments, but struggled to find purchasers.
An affiliate of the Carlyle Group, a giant US private equity firm, defaulted on almost 17 billion dollars of debt on Thursday and several small hedge funds have collapsed in recent weeks.
US President George W. Bush and the Federal Reserve have backed various measures, including sustained interest rate cuts, to ease the credit crunch, but it shows no sign of abating.
Treasury Secretary Henry Paulson, Fed chairman Ben Bernanke and Securities and Exchange Commission (SEC) chairman Christopher Cox urged banks, credit rating agencies and mortgage firms, to overhaul their practices Thursday.
The financial chiefs endorsed a range of recommendations aimed at boosting business transparency and restoring confidence in America's battered financial markets.
The intensifying credit turmoil is threatening some public works projects and is making it harder for firms to get business loans and for students to obtain loans for university courses.
The director of the SEC's division of trading and markets, Erik Sirri, told Congress last week that the contagion had spread to municipal bond auctions.
"There is no question that the recent dislocations in the municipal bond markets have created unanticipated hardships for municipal issuers and in some cases dramatically increased their borrowing costs," Sirri said.
If US cities and states cannot sell municipal bonds to investors it could threaten plans to build new roads, schools, airports and other public works projects.
The state of Michigan has temporarily suspended a student loan program called MI-LOAN citing "the current and unprecedented capital markets dislocation."
Veteran money managers say the escalating credit crisis is one of the worst they have witnessed in recent decades and could push the economy into a recession.
Praveen said economic growth will likely rebound in the third quarter due to a 168-billion-dollar government economic stimulus package, but he said consumers will need to keep spending to keep the economy on its legs.
source:http://www.lankabusinessonline.com/fullstory.php?newsID=1061095213&no_view=1&SEARCH_TERM=35
Monday, March 10, 2008
Make instant money apply for student loans with no cosigner
When it comes to money matter through loans its not easy to get general student loans. As they need cosigner collateral and will go through bad credit check. But in need of instant money these things are very much frustrating and make things worse. So to cope up with this frustration and depression of students there are many lenders in the market providing student loans without cosigner. Yes these loans does not need any cosigner , collateral and dont go through any credit check.
You just have to go online and apply for private student loans with no cosigner and within hours of your application form you will get the money directly into your checking bank account. Yes companies directly transfer the money into your checking bank account. So you need a checking bank account and a permanent US residency to avail these loans. this is all you need to avail the money in few hours.
The best way to get easy and hassel free money is through these loans. But always take care of the high interest rates and be promt in repaying of the loan amount. These loans are also available for the international students. So you can apply today and get the money required to make your dreams come true. For more informatino visit no cosigner student loans.
source:http://www.losangeleschronicle.com/articles/54406
You just have to go online and apply for private student loans with no cosigner and within hours of your application form you will get the money directly into your checking bank account. Yes companies directly transfer the money into your checking bank account. So you need a checking bank account and a permanent US residency to avail these loans. this is all you need to avail the money in few hours.
The best way to get easy and hassel free money is through these loans. But always take care of the high interest rates and be promt in repaying of the loan amount. These loans are also available for the international students. So you can apply today and get the money required to make your dreams come true. For more informatino visit no cosigner student loans.
source:http://www.losangeleschronicle.com/articles/54406
Sunday, March 2, 2008
New student loan site forces banks to bid for your child’s future
The premiere destination for students and their parents to get the college loan information they need quickly, simply, and effectively. The site takes a different approach than traditional student loan destinations, by matching borrowers with lenders that meet their specific needs.
Participating financiers are required to bid for the business of applicants, ensuring that parents and students alike get the best loan at the most competitive rate.
Borrowers can go to and apply for federal or private student loans. Once the information is submitted, the patented filtering process will deliver up to six viable lenders with requested pricing options. The user then selects which banks they prefer, and the chosen lenders will begin the bidding process.
lso provides an enormous amount of information on student loans, giving families the opportunity to do comparable research. Site creators developed advanced tools to make the most thorough and user-friendly source of student loan information online.
The site offers a full glossary of terms, frequently asked questions, financial aid calendars, and extensive information on specific colleges to help borrowers navigate through the process.
simple design and wealth of information has been created with the parents and students in mind - helping them to make informed decisions when borrowing money for education.
source:http://lifestyle.monstersandcritics.com/news/article_1393475.php/New_student_loan_site_forces_banks_to_bid_for_your_child%92s_future
Thursday, February 14, 2008
Online student loan consolidation
Student loan consolidation refers to wraping all your student loans into a single loan with one lender and one repayment plan. You can plan to consolidate your loan like refinancing a home mortgage. The time you consolidate your loan, the balances of your other current loans are paid off, with the total balance playing over into one consolidated loan.
Here are the top 5 benefits of student loan consolidation:
1. Lower monthly payments
By consolidating all your student loans into one loan, you only need to pay off one loan monthly instead of several student loans monthly. Thus, your monthly payment is lower.
2. Pay only one loan monthly instead of several student loans monthly
It is a lot easier if you have to manage only one student loan instead of several student loans with different payment deadlines. Also, sometimes with many student loans, you may end up forgetting to pay one student loan.
3. Low, fixed interest rate
By consolidating your student loans, you will be able to take advantages of low, fixed interest rates
4. No credit check or processing fees
No credit check is required during the application of a student loan consolidation. The payment plans and terms are usually quite flexible in that they can customize it according to your financial standing.
5. Make monthly student loan payment electronically
While it is not necessary to make payment electronically, using direct debit from your bank account will prevent you from forgetting to make a payment.
Speaking of electronic payments it is possible here at Student Financial Advisors to do an online student loan consolidation. Our online student loan consolidation application is convenient, fully automated and secure. You'll have a choice to sign your application electronically ("e-signature"), or to print out your completed application immediately for your signature.
Source:http://www.transworldnews.com/NewsStory.aspx?id=35852&cat=15
Here are the top 5 benefits of student loan consolidation:
1. Lower monthly payments
By consolidating all your student loans into one loan, you only need to pay off one loan monthly instead of several student loans monthly. Thus, your monthly payment is lower.
2. Pay only one loan monthly instead of several student loans monthly
It is a lot easier if you have to manage only one student loan instead of several student loans with different payment deadlines. Also, sometimes with many student loans, you may end up forgetting to pay one student loan.
3. Low, fixed interest rate
By consolidating your student loans, you will be able to take advantages of low, fixed interest rates
4. No credit check or processing fees
No credit check is required during the application of a student loan consolidation. The payment plans and terms are usually quite flexible in that they can customize it according to your financial standing.
5. Make monthly student loan payment electronically
While it is not necessary to make payment electronically, using direct debit from your bank account will prevent you from forgetting to make a payment.
Speaking of electronic payments it is possible here at Student Financial Advisors to do an online student loan consolidation. Our online student loan consolidation application is convenient, fully automated and secure. You'll have a choice to sign your application electronically ("e-signature"), or to print out your completed application immediately for your signature.
Source:http://www.transworldnews.com/NewsStory.aspx?id=35852&cat=15
Monday, February 11, 2008
An eye for service
Making the decision to join the Army Reserves during wartime with a private optometry practice and a family in Mitchell was not an easy one for Dr. Steve Schlegel.
“He’s been out of the National Guard for awhile, but he wanted to do something more,” said Vicky Schlegel, Steve’s wife of 16 years. “He talked about joining the Reserves before. We knew it was risky, being self-employed, and it would pose some challenges, but it’s been a good decision for him.”
That’s because the decision falls in line with Steve’s respect for the military, and it has afforded him the ability to pay off the student loans he accrued after graduating from optometry school in 1997. It has also offered the Mitchell native a new challenge and the ability to continue his patriotic dream.
“I get to put on my uniform, support my country and they pay for my college and I make a little extra money,” Steve said. “It’s a win-win situation. I am very glad I did it. If I get deployed, it’s a challenge we’ll take on.”
Steve joined the Reserves in July. A 1987 graduate of Mitchell High School, he joined the Army immediately after graduation and served for two years. From 1989 to 1994, he served in the Indiana National Guard.
“I wanted to stay in to retire,” he said. “That was my ultimate goal. But I was trying to raise a family and finish optometry school, and it was taking too much time, so I resigned my commission in 1994.
“I’ve always appreciated the military and anyone who has served or is serving, especially the people who are enlisting now. I have the utmost respect for anyone who serves in any branch.”
But joining the Reserves is not without its dangers. The likelihood of deployment or a call to active duty is inevitable for the eye doctor.
“We’ll have everything in place for if and when that happens, and we know it’s a big challenge for us because I am self-employed,” Steve said. “I’m excited — not excited about being deployed — but when that day comes, and it will, it’ll be a good experience for me, something I can look back on years down the road. I’ll be able to look back on what I’ve done and where I’ve been. It’ll be an exciting challenge when that happens.”
But he also knows the toughest challenge will be for his wife and three daughters, who will be left in Mitchell, whether he’s deployed to a combat zone or called to active duty in the United States.
“You have to give so much credit to the spouses in this situation,” Steve said, “because they are the ones left at home. It’s actually somewhat easy (for the Reservist) when you think about what the spouse is left to take care of. If I am activated or deployed, the separation won’t be new to Vicky and me because almost as soon as we started dating, I left for the Army and there were separations like that while we were married and I was in the National Guard. She’s tough, and will have enough going on with the girls to keep her busy. It’s just going to be the support aspect over it. And we haven’t been separated like this since we’ve had a family.”
But, regardless, his family supports his decision to join the Reserves.
“My family has always been 100 percent supportive of my military career,” Steve said. “The girls (his three daughters Jocelyn, Fiona and Audrey) know what’s going on with the war, but they’re not scared. When I got my uniform, for example, they all had to try it on and mock Dad. I told them to get used to it because they’re all going into the military after high school, and they just make faces at me.”
For now, however, it’s life as usual for the Schlegels.
“The only thing I know for a fact right now is that I’m going to an officers’ basic course in Texas for about five weeks this spring,” Steve said. “And, of course, you have to train for two weeks in the summer. I’ve heard talk that we’re going to close the business and move, and that’s absolutely not true. When I am deployed or called to active duty, then we’ll have a plan in place to take care of our patients and make the transition absolutely seamless for them.”
source:http://www.tmnews.com/stories/2008/02/11/news.nw-743835.tms
“He’s been out of the National Guard for awhile, but he wanted to do something more,” said Vicky Schlegel, Steve’s wife of 16 years. “He talked about joining the Reserves before. We knew it was risky, being self-employed, and it would pose some challenges, but it’s been a good decision for him.”
That’s because the decision falls in line with Steve’s respect for the military, and it has afforded him the ability to pay off the student loans he accrued after graduating from optometry school in 1997. It has also offered the Mitchell native a new challenge and the ability to continue his patriotic dream.
“I get to put on my uniform, support my country and they pay for my college and I make a little extra money,” Steve said. “It’s a win-win situation. I am very glad I did it. If I get deployed, it’s a challenge we’ll take on.”
Steve joined the Reserves in July. A 1987 graduate of Mitchell High School, he joined the Army immediately after graduation and served for two years. From 1989 to 1994, he served in the Indiana National Guard.
“I wanted to stay in to retire,” he said. “That was my ultimate goal. But I was trying to raise a family and finish optometry school, and it was taking too much time, so I resigned my commission in 1994.
“I’ve always appreciated the military and anyone who has served or is serving, especially the people who are enlisting now. I have the utmost respect for anyone who serves in any branch.”
But joining the Reserves is not without its dangers. The likelihood of deployment or a call to active duty is inevitable for the eye doctor.
“We’ll have everything in place for if and when that happens, and we know it’s a big challenge for us because I am self-employed,” Steve said. “I’m excited — not excited about being deployed — but when that day comes, and it will, it’ll be a good experience for me, something I can look back on years down the road. I’ll be able to look back on what I’ve done and where I’ve been. It’ll be an exciting challenge when that happens.”
But he also knows the toughest challenge will be for his wife and three daughters, who will be left in Mitchell, whether he’s deployed to a combat zone or called to active duty in the United States.
“You have to give so much credit to the spouses in this situation,” Steve said, “because they are the ones left at home. It’s actually somewhat easy (for the Reservist) when you think about what the spouse is left to take care of. If I am activated or deployed, the separation won’t be new to Vicky and me because almost as soon as we started dating, I left for the Army and there were separations like that while we were married and I was in the National Guard. She’s tough, and will have enough going on with the girls to keep her busy. It’s just going to be the support aspect over it. And we haven’t been separated like this since we’ve had a family.”
But, regardless, his family supports his decision to join the Reserves.
“My family has always been 100 percent supportive of my military career,” Steve said. “The girls (his three daughters Jocelyn, Fiona and Audrey) know what’s going on with the war, but they’re not scared. When I got my uniform, for example, they all had to try it on and mock Dad. I told them to get used to it because they’re all going into the military after high school, and they just make faces at me.”
For now, however, it’s life as usual for the Schlegels.
“The only thing I know for a fact right now is that I’m going to an officers’ basic course in Texas for about five weeks this spring,” Steve said. “And, of course, you have to train for two weeks in the summer. I’ve heard talk that we’re going to close the business and move, and that’s absolutely not true. When I am deployed or called to active duty, then we’ll have a plan in place to take care of our patients and make the transition absolutely seamless for them.”
source:http://www.tmnews.com/stories/2008/02/11/news.nw-743835.tms
Hope student loans get friendlier
The rising interest rates have slowed down the growth in certain interest-sensitive sectors such as auto, real estate, consumer durables, etc. In fact, in the consumer durables sector the growth has been negative. This slow down has been a worry for the Government. While it may not be possible to reduce the interest rates in the immediate future to prime-up these sectors, the Government could rationalise some of the indirect taxes such as excise, value added tax (VAT), etc. to give some relief to such sectors, especially the consumer durables.
Hence, people looking to buy television set, refrigerator, bike, etc. could possibly wait till the budget. The chances of any increase in rates are anyway quite remote.
Kamal Aggarwal of Ernst & Young says…
The budget would not dramatically alter the Customs and Excise duty landscape in respect of consumer goods.
Loan expert Harsh Roongta says…
The already announced education refinance corporation (funded from the education cess that we pay) should be operationalised. This corporation can share risks with the commercial banks as well as provide refinance at rates that can make educational loans as profitable as any other loan business for the banks.
An official mechanism needs to be in place for grading various education courses (based on their ability to increase employability, earnings potential, etc). With this the banks will be able to objectively assess the risk of providing loans for funding a specific course.
A complete revamp of the education loan sector is vital. Today, education loans are essentially being disbursed mainly by the public sector banks because of administrative fiat and not because it makes commercial sense for the banks.
Many students can’t take an education loan because they have no collateral or their parents don’t have enough income to be a guarantor. While this may not affect students who try for the IITs or the IIMs, a vast majority of students are affected by this lack of access to education loans.
source:http://www.moneycontrol.com/india/news/tax-report/hope-student-loans-get-friendlier/11/00/325484
Tuesday, January 29, 2008
Benefits of Student Loan Debt Consolidation
The benefits of student loan debt consolidation are that:
• The rate of interest is lower
• It reduces your monthly payments as the term of loan repayment is increased to 30 years, depending on the loan balance
• The repayment is consolidated to a single check payment each month.
Student debt consolidation loan is available formats, secured and unsecured. Secured student debt consolidation loan offers cheap interest rate for the collateral attachment involved in this kind of loans. On the other hand, unsecured student debt consolidation loan offers loan without any collateral. Moreover, student debt consolidation loan is also available online which is, indeed. One of the best benefits associated with this loan which makes the rates cheap online. Also, a number of websites offer valuable suggestions for debt consolidation. Student debt consolidation loan ahs become quite popular these days among the various student-sections for their cheap rates and single loan with single interest rates.
For, the best thing about the student debt consolidation loan UK is that, these days, this loan can be accessed and applied through online too. There are innumerable sites of student debt consolidation loan UK, cull some of them and make a comparative study of the terms and conditions. Lastly, make your plan of student debt consolidation loan UK according to your financial feasibility.
• The rate of interest is lower
• It reduces your monthly payments as the term of loan repayment is increased to 30 years, depending on the loan balance
• The repayment is consolidated to a single check payment each month.
Student debt consolidation loan is available formats, secured and unsecured. Secured student debt consolidation loan offers cheap interest rate for the collateral attachment involved in this kind of loans. On the other hand, unsecured student debt consolidation loan offers loan without any collateral. Moreover, student debt consolidation loan is also available online which is, indeed. One of the best benefits associated with this loan which makes the rates cheap online. Also, a number of websites offer valuable suggestions for debt consolidation. Student debt consolidation loan ahs become quite popular these days among the various student-sections for their cheap rates and single loan with single interest rates.
For, the best thing about the student debt consolidation loan UK is that, these days, this loan can be accessed and applied through online too. There are innumerable sites of student debt consolidation loan UK, cull some of them and make a comparative study of the terms and conditions. Lastly, make your plan of student debt consolidation loan UK according to your financial feasibility.
Sunday, January 27, 2008
Government may help with student-loan debt
The former is the $20,000 in loans of the typical college graduate. The latter is four or six times that amount, typically racked up by those attending grad school at an elite university or medical school.
It might be easier to manage big payments if you land a high-paying job, say, as an associate at a large law firm. But if you enter a field where the pay isn't so grand, you can be repaying student loans for most, if not all, of your career.
Lisa Brown of Bel Air, Md., finds herself in that latter situation. The 48-year-old chiropractor has $95,000 in student loans, but makes only about $30,000 a year after taxes.
There are ways that debt can be wiped out, although they may require you to make payments for years.
Some programs are newly created by Congress, such as loan forgiveness for those in public service.
The first step is to know whether you have federal or private loans.
Private loans don't offer loan forgiveness or the friendly payment plans you can receive from the federal government.
"It's like having credit-card debt; whether the lender wants to help you is at their discretion," said Deanne Loonin, a staff attorney for the National Consumer Law Center. The group recently launched a Web site for borrowers at studentloanborrowerassistance.org.
If you have federal loans, there are three options for erasing debt. (There are others, such as bankruptcy, but it is tough to qualify.) Of the three, two require that your loans be through the government's direct-lending program.
If your federal loan comes through a private lender, you can switch to direct lending by consolidating your loans, said Mark Kantrowitz, publisher of FinAid, an online provider of student-aid information.
Private lenders, not wanting to lose business, likely won't tell you how to do it, Kantrowitz said. Go to the Department of Education's site ( www.loanconsolidation.ed.gov) to learn how.
Here are your options:
*Income-contingent repayment
Once you're in the direct-lending program you can ask for this borrower-friendly plan. Lower-income borrowers can reduce their monthly payments, and debt remaining after 25 years of payments is erased.
Payments are 20 percent of discretionary income. That's defined as the amount of your adjusted gross income that exceeds the poverty level. If you are at the poverty level or below, your payment is zero, Kantrowitz said. And if your income stays at the poverty level for 25 years and you never make a payment, the balance would be forgiven, he said.
*Income-based repayment
This option, which takes effect in July 2009, is generous.
Payments are 15 percent of discretionary income. And in this case discretionary income is income exceeding 150 percent of the poverty level. Again, you don't have to make a payment if your income falls below that. Unpaid balances after 25 years are forgiven. You don't have to be in the direct-lending program to be eligible.
*Public-service forgiveness
This new program helps those entering fields that society values but underpays. That includes police, school librarians, social workers and government and nonprofit employees.
You must make 10 years' worth of on-time payments while working in public service. After that, remaining debt is forgiven. Your loans must be in the direct-lending program.
Under the standard schedule, student loans are repaid in 10 years.
The most urgent message here: No matter how deep in debt you are, make sure you don't fall too far behind, or worse, default.
source:http://www.orlandosentinel.com/business/orl-ymdebt2708jan27,0,6974343.story
It might be easier to manage big payments if you land a high-paying job, say, as an associate at a large law firm. But if you enter a field where the pay isn't so grand, you can be repaying student loans for most, if not all, of your career.
Lisa Brown of Bel Air, Md., finds herself in that latter situation. The 48-year-old chiropractor has $95,000 in student loans, but makes only about $30,000 a year after taxes.
There are ways that debt can be wiped out, although they may require you to make payments for years.
Some programs are newly created by Congress, such as loan forgiveness for those in public service.
The first step is to know whether you have federal or private loans.
Private loans don't offer loan forgiveness or the friendly payment plans you can receive from the federal government.
"It's like having credit-card debt; whether the lender wants to help you is at their discretion," said Deanne Loonin, a staff attorney for the National Consumer Law Center. The group recently launched a Web site for borrowers at studentloanborrowerassistance.org.
If you have federal loans, there are three options for erasing debt. (There are others, such as bankruptcy, but it is tough to qualify.) Of the three, two require that your loans be through the government's direct-lending program.
If your federal loan comes through a private lender, you can switch to direct lending by consolidating your loans, said Mark Kantrowitz, publisher of FinAid, an online provider of student-aid information.
Private lenders, not wanting to lose business, likely won't tell you how to do it, Kantrowitz said. Go to the Department of Education's site ( www.loanconsolidation.ed.gov) to learn how.
Here are your options:
*Income-contingent repayment
Once you're in the direct-lending program you can ask for this borrower-friendly plan. Lower-income borrowers can reduce their monthly payments, and debt remaining after 25 years of payments is erased.
Payments are 20 percent of discretionary income. That's defined as the amount of your adjusted gross income that exceeds the poverty level. If you are at the poverty level or below, your payment is zero, Kantrowitz said. And if your income stays at the poverty level for 25 years and you never make a payment, the balance would be forgiven, he said.
*Income-based repayment
This option, which takes effect in July 2009, is generous.
Payments are 15 percent of discretionary income. And in this case discretionary income is income exceeding 150 percent of the poverty level. Again, you don't have to make a payment if your income falls below that. Unpaid balances after 25 years are forgiven. You don't have to be in the direct-lending program to be eligible.
*Public-service forgiveness
This new program helps those entering fields that society values but underpays. That includes police, school librarians, social workers and government and nonprofit employees.
You must make 10 years' worth of on-time payments while working in public service. After that, remaining debt is forgiven. Your loans must be in the direct-lending program.
Under the standard schedule, student loans are repaid in 10 years.
The most urgent message here: No matter how deep in debt you are, make sure you don't fall too far behind, or worse, default.
source:http://www.orlandosentinel.com/business/orl-ymdebt2708jan27,0,6974343.story
Student loans to be impacted by subprime lending crisis
Lenders that process federal Stafford loans and PLUS loans as well as private loan companies are expected to require students borrowing for the first time this spring semester to have higher credit scores, and may impose other changes to their policies, CNNMoney.com reports. Borrowers should anticipate higher interest rates as the student loan industry tries to cope with the credit crisis and the effects of the College Cost Reduction and Access Act of 2007, which cut payments to lenders and guarantee agencies.
Mark Kantrowitz, publisher of FinAid.org, an online provider of student aid information, predicts that many companies will no longer issue loans to students with credit scores below 650. In addition, loan companies will require more applicants to have co-signers. "I do expect it to be a little more difficult to get one of these private loans," Kantrowitz says, yahoonews.com reports.
Sallie Mae, the nation's largest student loan lender, said in a Securities and Exchange Commission filing last week that it would no longer offer loans to students with higher credit risks -- the subprime borrowers. Sallie Mae has seen higher than expected default rates, according to the Chicago Tribune. The company has also withdrawn from a recourse loan program in which it had shared risk with for-profit education companies for loans to students with poor credit.
Changes in federal policy will affect Stafford and PLUS borrowers, according to FinAid.org. Students should expect lenders to cut loan discounts and increase the minimum balance requirements for loan consolidation. FinAid expects that federal policy will discourage loan consolidation and minimum balances for loan consolidation will be $10,000. FinAid also expects that loan discounts like origination fee waivers and consolidation discounts will be cut, CNNMoney reports.
Among students looking for private loans, international students, who are not eligible for the federal loans, are having the most difficulty, says Rockne Bergman, manager of professional programs at the University of Minnesota's financial aid office.
"These lenders are just being very careful as to whom they are lending to. And they want to make sure they will be able to get those loans paid back," Bergman says, according to yahoonews.com.
Financial aid professionals are concerned about the potential increased costs for students in the current student loan market. "I haven't seen it this bad before," Pat Watkins, financial aid director at Eckerd College in St. Petersburg, College, who has worked in the financial aid industry for 34 years told yahoonews.com. She expects that students with existing loans will likely incur more costs and a second loan to be repaid.
Watkins has been told by loan companies NextStudent in Phoenix and Goal Financial in San Diego that they will not fund new Stafford or PLUS loans. And she worries that some students with poor credit could end up paying very high interest on private loans. "We haven't seen the full impact of this, but it is coming," she says.
But Robert Shireman, executive Director of the Project on Student Debt thinks that student borrowers, even those with bad credit, will benefit in the long run from the current turmoil. "I think on the balance it's a good thing," he told the Chicago Tribune. "It will drive colleges and students to look for better ways to finance college education that don't involve so much expense and risks for the students."
source:http://www.accountingweb.com/cgi-bin/item.cgi?id=104516&d=883&h=884&f=882&dateformat=%25e-%25h-%25y
Mark Kantrowitz, publisher of FinAid.org, an online provider of student aid information, predicts that many companies will no longer issue loans to students with credit scores below 650. In addition, loan companies will require more applicants to have co-signers. "I do expect it to be a little more difficult to get one of these private loans," Kantrowitz says, yahoonews.com reports.
Sallie Mae, the nation's largest student loan lender, said in a Securities and Exchange Commission filing last week that it would no longer offer loans to students with higher credit risks -- the subprime borrowers. Sallie Mae has seen higher than expected default rates, according to the Chicago Tribune. The company has also withdrawn from a recourse loan program in which it had shared risk with for-profit education companies for loans to students with poor credit.
Changes in federal policy will affect Stafford and PLUS borrowers, according to FinAid.org. Students should expect lenders to cut loan discounts and increase the minimum balance requirements for loan consolidation. FinAid expects that federal policy will discourage loan consolidation and minimum balances for loan consolidation will be $10,000. FinAid also expects that loan discounts like origination fee waivers and consolidation discounts will be cut, CNNMoney reports.
Among students looking for private loans, international students, who are not eligible for the federal loans, are having the most difficulty, says Rockne Bergman, manager of professional programs at the University of Minnesota's financial aid office.
"These lenders are just being very careful as to whom they are lending to. And they want to make sure they will be able to get those loans paid back," Bergman says, according to yahoonews.com.
Financial aid professionals are concerned about the potential increased costs for students in the current student loan market. "I haven't seen it this bad before," Pat Watkins, financial aid director at Eckerd College in St. Petersburg, College, who has worked in the financial aid industry for 34 years told yahoonews.com. She expects that students with existing loans will likely incur more costs and a second loan to be repaid.
Watkins has been told by loan companies NextStudent in Phoenix and Goal Financial in San Diego that they will not fund new Stafford or PLUS loans. And she worries that some students with poor credit could end up paying very high interest on private loans. "We haven't seen the full impact of this, but it is coming," she says.
But Robert Shireman, executive Director of the Project on Student Debt thinks that student borrowers, even those with bad credit, will benefit in the long run from the current turmoil. "I think on the balance it's a good thing," he told the Chicago Tribune. "It will drive colleges and students to look for better ways to finance college education that don't involve so much expense and risks for the students."
source:http://www.accountingweb.com/cgi-bin/item.cgi?id=104516&d=883&h=884&f=882&dateformat=%25e-%25h-%25y
Monday, January 21, 2008
Consolidation Loans - Should You Consolidate With Yet Another Loan ?
Consolidation Loans - Should You Consolidate Your Credit Card And Loan Debt ?
Loans and yet more loans! It seems that the TV, radio and internet are crammed full of consolidation loan adverts enticing us to consolidate our debt and say goodbye to our debt problems in one easy call to a loan company. Is it really that simple though?
A Debt Advisors Viewpoint Of Consolidation Loans
Having been a debt advisor for more years than I care to remember I have dealt with the issue of debt consolidation loans and other types of loans time and time again. The reason why consolidation loans are so attractive is that they promise the world in as much as they will apparently clear bad credit and debt problems, wrap up all of your other credit cards and loans into a single payment and allow you to sail off into the sunset debt free and without a worry in the world.
Well a much smarter person than I (my grandfather) once gave me a smart piece of advice when I was but a small lad, 'if it sounds and looks too good to be true then it probably is' His advice within the context of consolidation loans is only too true I have found during my years of working as a debt advisor for the debt help organisation Myvesta UK and Ireland.
The main problem with debt consolidation loans is the fact that the monthly repayments are often realistically too expensive for people to maintain and a good debt advisor will be able to demonstrate this to their clients by drawing up a realistic and sensible monthly budget plan that accounts for all of a persons regular spending commitments along with loans, credit cards and other debt obligations.
Being In Debt Is Tough But Consolidation Loans Are Not The Answer
In a recent article I wrote about how the credit crunch is affecting the ability of people obtaining bad credit loans with a view to consolidating debt. The main points I made in that article were that consolidation loans are being made more restrictive to applicants because of tighter lending criteria as a result of the credit crunch and why this was not necessarily such a bad thing for people with debt problems. I hope that the article was helpful for readers who are considering the pros and cons of a debt consolidation loan as it served to present the viewpoint of consolidation loans from a debt advisors perspective.
Debt advisors have a unique insight into the psychology of debt as they speak with and help so many people facing financial difficulties on a daily basis. A common challenge amongst debt advisors is to try to enable their clients to understand the reality of their true cash-flow position in order to understand the debt management options that are available to them. Quite often debt advisors point out that debt consolidation loans although initially a seemingly attractive offer are actually not a sensible option when a persons monthly budget has been examined closely. In particular secured debt consolidation loans are of prime concern and a good debt advisor will always ensure that a client is fully aware that a secured debt consolidation loan serves to swap unsecured credit debts to a larger debt that will be secured against a persons home equity. This will inevitably put that persons home more at risk from repossession if they are unable to keep up with the contractual consolidation loan debt repayments.
The Credit Rating Issue
Another common problem for debt advisors when discussing the debt consolidation loan option with clients is to try to get the client to understand that credit reports whilst are somewhat important are not that important that they should sway a person to take out a debt consolidation loan in order to keep their credit report more positive. This is often difficult because people are often very precious about how their credit report is viewed and believe that it is of the utmost importance to maintain a good credit report at all costs.
However struggling to maintain a good credit report can sometimes be a false economy if fundamentally their is a serious debt problem that need to be contended with. Debt consolidation loans may enable a person to maintain a better credit rating for a period of months but if the underlying issue is that a person simply has too much debt and the debt consolidation loan repayments are not actually affordable then it is typically only a matter of time before missed payments occur affecting both their credit rating and, in many cases of secured credit consolidation products, putting a persons property at risk of repossession.
A good debt advisor will always point out the entire range of debt management strategies open to individuals with financial problems that approach them for help. This includes talking about the merits of taking out a debt consolidation loan as well as the pitfalls. Ultimately the role of the debt advisor is to assess a persons situation after preparing a monthly budget with the client, advise them as to the range of formal and informal options and ensure that the implications of all the options are fully understood.
As debt consolidation loans in Ireland become more heavily advertised no doubt many people will be attracted to the option however it will always be worthwhile contacting an independent debt advisor in order to go through the budget generation process to obtain impartial debt advice before signing up for another loan that could serve to make a persons debt problems worse.
Source:http://myvesta.ie/articles/articles/36/1/Consolidation-Loans---Should-You-Consolidate-With-Yet-Another-Loan-/Page1.html
Loans and yet more loans! It seems that the TV, radio and internet are crammed full of consolidation loan adverts enticing us to consolidate our debt and say goodbye to our debt problems in one easy call to a loan company. Is it really that simple though?
A Debt Advisors Viewpoint Of Consolidation Loans
Having been a debt advisor for more years than I care to remember I have dealt with the issue of debt consolidation loans and other types of loans time and time again. The reason why consolidation loans are so attractive is that they promise the world in as much as they will apparently clear bad credit and debt problems, wrap up all of your other credit cards and loans into a single payment and allow you to sail off into the sunset debt free and without a worry in the world.
Well a much smarter person than I (my grandfather) once gave me a smart piece of advice when I was but a small lad, 'if it sounds and looks too good to be true then it probably is' His advice within the context of consolidation loans is only too true I have found during my years of working as a debt advisor for the debt help organisation Myvesta UK and Ireland.
The main problem with debt consolidation loans is the fact that the monthly repayments are often realistically too expensive for people to maintain and a good debt advisor will be able to demonstrate this to their clients by drawing up a realistic and sensible monthly budget plan that accounts for all of a persons regular spending commitments along with loans, credit cards and other debt obligations.
Being In Debt Is Tough But Consolidation Loans Are Not The Answer
In a recent article I wrote about how the credit crunch is affecting the ability of people obtaining bad credit loans with a view to consolidating debt. The main points I made in that article were that consolidation loans are being made more restrictive to applicants because of tighter lending criteria as a result of the credit crunch and why this was not necessarily such a bad thing for people with debt problems. I hope that the article was helpful for readers who are considering the pros and cons of a debt consolidation loan as it served to present the viewpoint of consolidation loans from a debt advisors perspective.
Debt advisors have a unique insight into the psychology of debt as they speak with and help so many people facing financial difficulties on a daily basis. A common challenge amongst debt advisors is to try to enable their clients to understand the reality of their true cash-flow position in order to understand the debt management options that are available to them. Quite often debt advisors point out that debt consolidation loans although initially a seemingly attractive offer are actually not a sensible option when a persons monthly budget has been examined closely. In particular secured debt consolidation loans are of prime concern and a good debt advisor will always ensure that a client is fully aware that a secured debt consolidation loan serves to swap unsecured credit debts to a larger debt that will be secured against a persons home equity. This will inevitably put that persons home more at risk from repossession if they are unable to keep up with the contractual consolidation loan debt repayments.
The Credit Rating Issue
Another common problem for debt advisors when discussing the debt consolidation loan option with clients is to try to get the client to understand that credit reports whilst are somewhat important are not that important that they should sway a person to take out a debt consolidation loan in order to keep their credit report more positive. This is often difficult because people are often very precious about how their credit report is viewed and believe that it is of the utmost importance to maintain a good credit report at all costs.
However struggling to maintain a good credit report can sometimes be a false economy if fundamentally their is a serious debt problem that need to be contended with. Debt consolidation loans may enable a person to maintain a better credit rating for a period of months but if the underlying issue is that a person simply has too much debt and the debt consolidation loan repayments are not actually affordable then it is typically only a matter of time before missed payments occur affecting both their credit rating and, in many cases of secured credit consolidation products, putting a persons property at risk of repossession.
A good debt advisor will always point out the entire range of debt management strategies open to individuals with financial problems that approach them for help. This includes talking about the merits of taking out a debt consolidation loan as well as the pitfalls. Ultimately the role of the debt advisor is to assess a persons situation after preparing a monthly budget with the client, advise them as to the range of formal and informal options and ensure that the implications of all the options are fully understood.
As debt consolidation loans in Ireland become more heavily advertised no doubt many people will be attracted to the option however it will always be worthwhile contacting an independent debt advisor in order to go through the budget generation process to obtain impartial debt advice before signing up for another loan that could serve to make a persons debt problems worse.
Source:http://myvesta.ie/articles/articles/36/1/Consolidation-Loans---Should-You-Consolidate-With-Yet-Another-Loan-/Page1.html
Wednesday, January 16, 2008
Student loan consolidation rates
The student loan consolidation rate is calculated as the weighted average rate of the current rates charged on the loans being consolidated, rounded up to the nearest one-eighth of a percent. This means the rate you'll pay won’t be more than one-eighth of a percent more than the effective rate on your individual loans. The rate is fixed for the life of the Consolidation Loan.
Stafford Loans
Stafford Loans disbursed after July 1, 2006 have a fixed interest rate of 6.80% in effect from July 1, 2006 through June 30, 2008 for loans in an in school, grace, deferment, or repayment status. For loans disbursed prior to July 1, 2006, the Stafford Loan rates change annually and have variable interest rates based on the 91-day Treasury-bill rate + 1.7% during school. An additional .60% increase is assessed upon graduation. This rate is capped at 8.25%
It is important to note that the government will pay the interest on a subsidized Stafford Loan while you are in school, during your six month grace period and also during authorized periods of deferment. If you have an unsubsidized Stafford Loan, you are responsible for the interest payment, but you have the ability to defer interest payments until after graduation.
PLUS Loans
PLUS Loans disbursed after July 1, 2006 have a fixed interest rate of 8.50% in effect from July 1, 2007 through June 30, 2008. For loans disbursed prior to July 1, 2006, the PLUS loan interest rate is adjusted annually, but is capped not to exceed 9.0%. Similar to the Stafford Loan, the PLUS Loan rate is also calculated based on the 91-day Treasury-bill rate. However, unlike the Stafford Loan you must add 3.1 percentage points to the rate. Parent borrowers can take up to 10 years to repay and PLUS Loan and will incur no penalties for early repayment.
Grad PLUS Loans
The Grad PLUS Loan interest rate for loans guaranteed on or after July 1, 2006 is fixed for the life of the loan and is 8.5%
Federal Consolidation Loans
The interest rate on a student consolidation loan will be based on the weighted average of the interest rate on your existing educational loans rounded up to the nearest 1/8th percent, not to exceed 8.25%. The interest rate is fixed for the life of the loan.
We here at Student Financial Advisors can offer you the barrower the following benefits for consolidating your student loans with us.
Other benefits for consolidating with Student Financial advisors include, lowering your monthly payment by as much as 51%. By extending the repayment period it is possible to lower your monthly payments by as much as 51%. Also, by consolidating, making payments is easier to keep track of, because you only get one monthly bill. We suggest that you use the optional automatic bill payment; you will still get monthly statements.
By consolidating
you renew your deferment eligibility, up to three years. Lastly, when the consolidation loan pays off all of your student loans this reflects positive on your credit report and therefore improves your credit.
As of February 1, 1999, both Federal Family Education Loans (FFEL) and Direct Consolidation Loans have the same interest rate. Before February 1, 1999, Consolidation Loans had variable interest rates.
If you have a Stafford Loan made on or after July 1, 1995, you can reduce your student loan consolidation rate by up to point six of a percentage point or more if you can consolidate before the end of your grace period.
Student loan consolidation allows you to simplify the repayment process by combining several types of federal education loans into one loan, so you make just one payment a month. Also, based on the incentives above your monthly payment might be lower than what you’re currently paying. Based on all of the incentives to consolidate your monthly payment and your effective student loan consolidation rate should be lower then you would otherwise pay.
Source:http://www.transworldnews.com/NewsStory.aspx?id=31068&cat=15
Stafford Loans
Stafford Loans disbursed after July 1, 2006 have a fixed interest rate of 6.80% in effect from July 1, 2006 through June 30, 2008 for loans in an in school, grace, deferment, or repayment status. For loans disbursed prior to July 1, 2006, the Stafford Loan rates change annually and have variable interest rates based on the 91-day Treasury-bill rate + 1.7% during school. An additional .60% increase is assessed upon graduation. This rate is capped at 8.25%
It is important to note that the government will pay the interest on a subsidized Stafford Loan while you are in school, during your six month grace period and also during authorized periods of deferment. If you have an unsubsidized Stafford Loan, you are responsible for the interest payment, but you have the ability to defer interest payments until after graduation.
PLUS Loans
PLUS Loans disbursed after July 1, 2006 have a fixed interest rate of 8.50% in effect from July 1, 2007 through June 30, 2008. For loans disbursed prior to July 1, 2006, the PLUS loan interest rate is adjusted annually, but is capped not to exceed 9.0%. Similar to the Stafford Loan, the PLUS Loan rate is also calculated based on the 91-day Treasury-bill rate. However, unlike the Stafford Loan you must add 3.1 percentage points to the rate. Parent borrowers can take up to 10 years to repay and PLUS Loan and will incur no penalties for early repayment.
Grad PLUS Loans
The Grad PLUS Loan interest rate for loans guaranteed on or after July 1, 2006 is fixed for the life of the loan and is 8.5%
Federal Consolidation Loans
The interest rate on a student consolidation loan will be based on the weighted average of the interest rate on your existing educational loans rounded up to the nearest 1/8th percent, not to exceed 8.25%. The interest rate is fixed for the life of the loan.
We here at Student Financial Advisors can offer you the barrower the following benefits for consolidating your student loans with us.
Other benefits for consolidating with Student Financial advisors include, lowering your monthly payment by as much as 51%. By extending the repayment period it is possible to lower your monthly payments by as much as 51%. Also, by consolidating, making payments is easier to keep track of, because you only get one monthly bill. We suggest that you use the optional automatic bill payment; you will still get monthly statements.
By consolidating
you renew your deferment eligibility, up to three years. Lastly, when the consolidation loan pays off all of your student loans this reflects positive on your credit report and therefore improves your credit.
As of February 1, 1999, both Federal Family Education Loans (FFEL) and Direct Consolidation Loans have the same interest rate. Before February 1, 1999, Consolidation Loans had variable interest rates.
If you have a Stafford Loan made on or after July 1, 1995, you can reduce your student loan consolidation rate by up to point six of a percentage point or more if you can consolidate before the end of your grace period.
Student loan consolidation allows you to simplify the repayment process by combining several types of federal education loans into one loan, so you make just one payment a month. Also, based on the incentives above your monthly payment might be lower than what you’re currently paying. Based on all of the incentives to consolidate your monthly payment and your effective student loan consolidation rate should be lower then you would otherwise pay.
Source:http://www.transworldnews.com/NewsStory.aspx?id=31068&cat=15
Get Rid From All Worries With Student Loan Debt Consolidation
Get rid of all monetary issues. Concentrate on studies at this stage of life. Student loan debt consolidation has come all way long to free you from financial troubles.
Are you finding it tough to meet both the ends? Ease your life while you concentrate on your studies with student loan debt consolidation and take your career to wild heights. Sky is the limit. You can always apply for loans and if you already have one and the rates of interest are bothering you, you can take up a giant student loan debt consolidation at lower rates of interest and wider pay back time span. Several companies these days provide free debt consolidation help for your quest for the best debt consolidation.
The huge student loan debt consolidation assists you take up one loan which curtails all your botherations for paying high interests to the debtors, and that too at low rates of interest. Government policies are designed which again reduces the interest to 2 to 3 percentage and at times if viable zero percentage debt consolidation is made available to the students for primary as well as higher studies. Scholarships are provided for specific trades as well as for few years which can be extended to zero percentage loans for pursuing higher education.
Guardians do provide support for studies but only for the basic amenities. Only student can understand, what are the other silly expenses which are, at times tough to cut down. For all that they have to depend on friends, relatives if any or high interest money lenders, which keep posing a mental pressure on the students and it becomes tough to manage both job as well as studies simultaneously. At such times of life, its specially designed student loan debt consolidation which serves as a blessing for the individuals.
The repayment system of the student loan debt consolidation begins only after the student graduates from the university, which helps both the parents as well as the ward and provides with a financial freedom. Students should not indulge in settling the debts themselves. Experienced debt settlement agency should be sought after which sets it optimally saving a lot of student’s valuable time. What should be taken due care of while choosing the debt consolidation is the cheapest rates of interest, repayment duration and penalties. This would perhaps be the first loan which student takes up in life time so would be unaware of the procedure and the rates of interest so at times may get trapped in wrong manner. The loan is easily sanctioned if the college has a better reputation and provides with pre-placement offers. If guardians take the guarantee, that is the other way out. But still proper advice should be taken before opting for any debt consolidation.
Christian debt consolidation is one of those prime agencies which provides such services not only to Christians but for all those students who reveal their interest in studies.
Source:http://www.americanchronicle.com/articles/48890
Are you finding it tough to meet both the ends? Ease your life while you concentrate on your studies with student loan debt consolidation and take your career to wild heights. Sky is the limit. You can always apply for loans and if you already have one and the rates of interest are bothering you, you can take up a giant student loan debt consolidation at lower rates of interest and wider pay back time span. Several companies these days provide free debt consolidation help for your quest for the best debt consolidation.
The huge student loan debt consolidation assists you take up one loan which curtails all your botherations for paying high interests to the debtors, and that too at low rates of interest. Government policies are designed which again reduces the interest to 2 to 3 percentage and at times if viable zero percentage debt consolidation is made available to the students for primary as well as higher studies. Scholarships are provided for specific trades as well as for few years which can be extended to zero percentage loans for pursuing higher education.
Guardians do provide support for studies but only for the basic amenities. Only student can understand, what are the other silly expenses which are, at times tough to cut down. For all that they have to depend on friends, relatives if any or high interest money lenders, which keep posing a mental pressure on the students and it becomes tough to manage both job as well as studies simultaneously. At such times of life, its specially designed student loan debt consolidation which serves as a blessing for the individuals.
The repayment system of the student loan debt consolidation begins only after the student graduates from the university, which helps both the parents as well as the ward and provides with a financial freedom. Students should not indulge in settling the debts themselves. Experienced debt settlement agency should be sought after which sets it optimally saving a lot of student’s valuable time. What should be taken due care of while choosing the debt consolidation is the cheapest rates of interest, repayment duration and penalties. This would perhaps be the first loan which student takes up in life time so would be unaware of the procedure and the rates of interest so at times may get trapped in wrong manner. The loan is easily sanctioned if the college has a better reputation and provides with pre-placement offers. If guardians take the guarantee, that is the other way out. But still proper advice should be taken before opting for any debt consolidation.
Christian debt consolidation is one of those prime agencies which provides such services not only to Christians but for all those students who reveal their interest in studies.
Source:http://www.americanchronicle.com/articles/48890
Sunday, January 13, 2008
Student Loan Consolidation - Get Rid Of Your Financial Problems
Student loan consolidation facilitates you in making 50% less monthly payments of what you were paying originally. Within just few steps, you can save a lot and fulfill your other desires. The few steps involved begin with the application form, which is further submitted and verified, and then you relax by leaving all the work on us. After all this, you only have to remember the date when the repayment of the student debt consolidation is to be made.
In the situation when the cost of education is growing higher and higher, the best option is to get the loans consolidated and bear the loan at low rate of interest, which is fixed until the loan exists. Consolidation program makes your life easy and stress free. You do not have to think of any other option when there is this option available.
With this program, your amount is extended to a period of 20-30 years and is repaid by making small monthly payments. Yes, low monthly payment is an important and attractive feature of debt consolidation. For choosing a lender, you need to do lots of research and select a genuine lender who offers good services and gives proper advice.
Applying for these loans can be simply done by filling an online application form and the lender does the rest. You only need to follow the steps as asked by them. For the repayment of the borrowed amount, you are expected to start the payment within 6 months after seeking the loan. Before filling in the application, collect the following information, which might help in quickly filling up the form. All you need is your personal information i.e. your date of birth, phone number, address, driving license etc. then some references along with their addresses and also the interest rate and the loan type.
Student federal loan consolidation helps the student a lot. Even when the borrower is unemployed, he can borrow the amount but within the limit of $1000-$30000 from the loan providing company. Such loans are easily approved and do not involve any credit checks or proofs. In case you are not able to arrange to make proper payments and then look for counseling, where you can get an advice, which could solve your issues in few minutes.
If a student is looking for a consolidation, then he can do it as soon as he leaves school or is enrolled for lesser than half course. Besides that, he can apply if his/her graduation is completed.
So, next time you want some more cash in your pocket then consolidate your loan with a quick online application.
Student loan consolidation is a program, which can be applied for in 10 minutes and can reduce your monthly payments to half. Ease your financial stress with student debt consolidation or student federal loan consolidation and concentrate on your studies.
Source:http://www.americanchronicle.com/articles/viewArticle.asp?articleID=48788
In the situation when the cost of education is growing higher and higher, the best option is to get the loans consolidated and bear the loan at low rate of interest, which is fixed until the loan exists. Consolidation program makes your life easy and stress free. You do not have to think of any other option when there is this option available.
With this program, your amount is extended to a period of 20-30 years and is repaid by making small monthly payments. Yes, low monthly payment is an important and attractive feature of debt consolidation. For choosing a lender, you need to do lots of research and select a genuine lender who offers good services and gives proper advice.
Applying for these loans can be simply done by filling an online application form and the lender does the rest. You only need to follow the steps as asked by them. For the repayment of the borrowed amount, you are expected to start the payment within 6 months after seeking the loan. Before filling in the application, collect the following information, which might help in quickly filling up the form. All you need is your personal information i.e. your date of birth, phone number, address, driving license etc. then some references along with their addresses and also the interest rate and the loan type.
Student federal loan consolidation helps the student a lot. Even when the borrower is unemployed, he can borrow the amount but within the limit of $1000-$30000 from the loan providing company. Such loans are easily approved and do not involve any credit checks or proofs. In case you are not able to arrange to make proper payments and then look for counseling, where you can get an advice, which could solve your issues in few minutes.
If a student is looking for a consolidation, then he can do it as soon as he leaves school or is enrolled for lesser than half course. Besides that, he can apply if his/her graduation is completed.
So, next time you want some more cash in your pocket then consolidate your loan with a quick online application.
Student loan consolidation is a program, which can be applied for in 10 minutes and can reduce your monthly payments to half. Ease your financial stress with student debt consolidation or student federal loan consolidation and concentrate on your studies.
Source:http://www.americanchronicle.com/articles/viewArticle.asp?articleID=48788
Student Debt Consolidation - A Brief Overview
Student debt consolidation is an easy way out for students and their parents, who are at a loss with documents and repayment dates every month, thanks to the multiple advances taken for education. Many types of advance loans are available for their education. Broadly speaking, student credit is of two types: Federal Loans and Private Loans. If you are not very sure about the system of Federal loan consolidation, let us get a quick overview here.
Federal loans are those advances that are sanctioned by the U.S. education authorities and eligible students can easily avail these forms of finance. Again, these are of many types. Some of the more popular ones that can be included in student debt consolidation are as follows:
1.Federal Perkins Loans
2.Stafford Loans
3.PLUS Loans
Many advantages are associated with the Federal form of credit. The main advantage being that these advances come with the US Government guarantee or reliability. Secondly, this credit is exempted from tax, thereby giving the students the benefit of increased cash in hand. Finally, these advances provide the students the facility of deferred payments, incase they choose to become students again. In the worst-case scenario, if the applicant cannot repay the credit due to unemployment or serious illness, Federal advances “might” be excused.
Private Loans
These are all advances that are not taken from the US Government education authorities. They can be taken from a private bank, a friend or relative.
Points To Remember About Federal Loan Consolidation
Federal and private loans cannot be merged. Try to consolidate the former into one program and all the latter into another. Federal loan consolidation, as the name suggests, is for federal loans only. However, not every federal mortgage taken is eligible for consolidation! Firstly, the borrower must be out of school or college when he is going in for these loans. Secondly, the federal advance repayment, which is to be consolidated, must have started or be in its grace period. Finally, an important point is that the consolidated amount should be above $10,000.
Advantages
When you decide to consolidate, you are merging multiple advances into one. Therefore, you will have just one advance under your name and no longer do you have to keep a track of multiple due dates and the exact installment amounts. Since you have just one advance to think of, there are less chances of missing installments and your credit ratings going awry. The main essence this program is that the consolidated monthly installment is considerably lesser than that what the students would have paid without consolidating. In some cases, undergraduates can save up to 40%! Look for federal mortgage consolidation programs that do not check the borrower’s credit ratings. The scholar or his parents, whoever is responsible for repaying, can stretch the repayment over a period of 30 years! Finally, student debt consolidation is a serious matter; always consult an expert before you choose a company to consolidate your debt and sign on the dotted line.
a company to consolidate your debt and sign on the dotted line.
Student debt consolidation can be the ray of hope in the cases of many lives of young students. Federal loan consolidation is also a warning to youngsters to curb their desires to avoid debt. For more information visit student debt consolidation loans.
Source:http://www.americanchronicle.com/articles/viewArticle.asp?articleID=48960
Federal loans are those advances that are sanctioned by the U.S. education authorities and eligible students can easily avail these forms of finance. Again, these are of many types. Some of the more popular ones that can be included in student debt consolidation are as follows:
1.Federal Perkins Loans
2.Stafford Loans
3.PLUS Loans
Many advantages are associated with the Federal form of credit. The main advantage being that these advances come with the US Government guarantee or reliability. Secondly, this credit is exempted from tax, thereby giving the students the benefit of increased cash in hand. Finally, these advances provide the students the facility of deferred payments, incase they choose to become students again. In the worst-case scenario, if the applicant cannot repay the credit due to unemployment or serious illness, Federal advances “might” be excused.
Private Loans
These are all advances that are not taken from the US Government education authorities. They can be taken from a private bank, a friend or relative.
Points To Remember About Federal Loan Consolidation
Federal and private loans cannot be merged. Try to consolidate the former into one program and all the latter into another. Federal loan consolidation, as the name suggests, is for federal loans only. However, not every federal mortgage taken is eligible for consolidation! Firstly, the borrower must be out of school or college when he is going in for these loans. Secondly, the federal advance repayment, which is to be consolidated, must have started or be in its grace period. Finally, an important point is that the consolidated amount should be above $10,000.
Advantages
When you decide to consolidate, you are merging multiple advances into one. Therefore, you will have just one advance under your name and no longer do you have to keep a track of multiple due dates and the exact installment amounts. Since you have just one advance to think of, there are less chances of missing installments and your credit ratings going awry. The main essence this program is that the consolidated monthly installment is considerably lesser than that what the students would have paid without consolidating. In some cases, undergraduates can save up to 40%! Look for federal mortgage consolidation programs that do not check the borrower’s credit ratings. The scholar or his parents, whoever is responsible for repaying, can stretch the repayment over a period of 30 years! Finally, student debt consolidation is a serious matter; always consult an expert before you choose a company to consolidate your debt and sign on the dotted line.
a company to consolidate your debt and sign on the dotted line.
Student debt consolidation can be the ray of hope in the cases of many lives of young students. Federal loan consolidation is also a warning to youngsters to curb their desires to avoid debt. For more information visit student debt consolidation loans.
Source:http://www.americanchronicle.com/articles/viewArticle.asp?articleID=48960
Thursday, January 10, 2008
Chase Student Loans, Key to Getting A College Education
There are a number of financing institutions that extend help to those students who aspire to go to college, but just do not have enough funds for it. College education has always been of great importance towards finding a well paying profession.
Tertiary education is one of the factors employers give importance to when hiring a new professional level employee. While it is true that not everyone can afford college education, there are various groups of people and institution who are willing to assist them with grants and scholarships. Although sometimes, it will be in the form of student loan which, of course, must be repaid by the borrower, student loans give hope for those who are determined to pursue their education. One of the leading financial institutions that provide this type of assistance is Chase Education Finance. They provide what is called Chase Student Loans.
Chase Education Finance is a division of JP Morgan Chase & Co. They are one of the leaders in investment banking, financial services, small business and commercial banking, asset and wealth management and private equity. Chase student loans provide educational products and services that students can avail of. Additional information about other types of loan that they offer can be viewed online.
For those who are undergraduate students, their parents who needs funding for their children?s education, graduate students, high school students and recent graduates, Chase student loans has federal Stafford loan which they can apply for. Besides having a convenient application process, one of the admirable things about this loan is that it does not look at the credit history of the student. They also pride themselves in giving out low interest rates and flexible repayment schemes, which may be delayed until after the student?s graduation.
Chase also has a new Chase Medical Education Program which is offered to medical students to help fund their education. It offers medical students financing options such as zero-fee Stafford loan, a Private Student Loan and a residency loan.
Because some students encounter a lot of unexpected financial problems when enrolled in college, some of them could not help but file for another loan. Although this is possible, take note that it can cause some problems, especially by the time they have already graduated and must start repaying the loans incurred. It is recommended to keep record of the loans made and how much is owed from each lender, in order to lessen the burden of debt management. You might be more than please to know that Chase Education Finance also offers loan consolidation programs that can sum up all other existing loans so you can make your repayments much easier. Another option for those students with multiple loans is to apply for a consolidation loan. This student loan consolidation advice will save you a lot of money over the term of the loan and lower your payments.
Chase student loans have been trusted for many years. If you are a determined student who wishes to overcome financial challenges towards getting your coveted college diploma, you can apply for Chase?s educational loan services and start your way to graduation.
source:http://www.thefreelibrary.com/Chase+Student+Loans,+Key+to+Getting+A+College+Education-a01073849081
Tertiary education is one of the factors employers give importance to when hiring a new professional level employee. While it is true that not everyone can afford college education, there are various groups of people and institution who are willing to assist them with grants and scholarships. Although sometimes, it will be in the form of student loan which, of course, must be repaid by the borrower, student loans give hope for those who are determined to pursue their education. One of the leading financial institutions that provide this type of assistance is Chase Education Finance. They provide what is called Chase Student Loans.
Chase Education Finance is a division of JP Morgan Chase & Co. They are one of the leaders in investment banking, financial services, small business and commercial banking, asset and wealth management and private equity. Chase student loans provide educational products and services that students can avail of. Additional information about other types of loan that they offer can be viewed online.
For those who are undergraduate students, their parents who needs funding for their children?s education, graduate students, high school students and recent graduates, Chase student loans has federal Stafford loan which they can apply for. Besides having a convenient application process, one of the admirable things about this loan is that it does not look at the credit history of the student. They also pride themselves in giving out low interest rates and flexible repayment schemes, which may be delayed until after the student?s graduation.
Chase also has a new Chase Medical Education Program which is offered to medical students to help fund their education. It offers medical students financing options such as zero-fee Stafford loan, a Private Student Loan and a residency loan.
Because some students encounter a lot of unexpected financial problems when enrolled in college, some of them could not help but file for another loan. Although this is possible, take note that it can cause some problems, especially by the time they have already graduated and must start repaying the loans incurred. It is recommended to keep record of the loans made and how much is owed from each lender, in order to lessen the burden of debt management. You might be more than please to know that Chase Education Finance also offers loan consolidation programs that can sum up all other existing loans so you can make your repayments much easier. Another option for those students with multiple loans is to apply for a consolidation loan. This student loan consolidation advice will save you a lot of money over the term of the loan and lower your payments.
Chase student loans have been trusted for many years. If you are a determined student who wishes to overcome financial challenges towards getting your coveted college diploma, you can apply for Chase?s educational loan services and start your way to graduation.
source:http://www.thefreelibrary.com/Chase+Student+Loans,+Key+to+Getting+A+College+Education-a01073849081
Sunday, January 6, 2008
Student Loan Consolidation: Smart & Easy
Consolidating your student loans is one of the smartest and easiest things you can do to reduce your student debt burden, provided you research your options carefully. Why consolidate your student loans? A student consolidation loan allows you to combine your federal student loans into a single loan with one monthly payment, which is usually lower than the payment required under the standard 10-year repayment option. Consolidating can allow you to lock in some of the lowest fixed interest rates in recent history. Consolidating also allows you to make lower monthly payments. In some cases, consolidating your student loan can also qualify you for new or renewed deferments.
Most student consolidation loans have fixed interest rates that are based on the interest rates of the loans being consolidated. Studies have found that the amount you save by consolidating student loans can be very significant—up to 58 percent, according to some figures. What kind of student debt can be consolidated? Most federal aid, such as Federal Stafford loans, Federal Direct Loans, Federal Perkins loans, and many other types of student loans, qualify for consolidation. Many federal loans already have low fixed interest rates.
Before you proceed with consolidation, make certain the rate on your consolidated loan will indeed be lower than your current rate. The whole point of consolidation, after all, is to try to make the process of paying student debt easier, and hopefully, to pay less overall. Although consolidation can simplify loan repayment significantly and it does indeed lower your monthly payment, it also can increase the total cost of your student debt. Student loan consolidation provides lower monthly payments by giving the borrower up to 30 years to repay their loans. Thus, you'll be making more payments and pay more in interest. If you don't necessarily need monthly payment relief, you should compare the cost of repaying your unconsolidated loans against the cost of repaying a consolidation loan.
If you decide to proceed with consolidating your student loans, you’ll find the process to be very flexible. Whether you are a graduating senior, or have been paying off student loans for years, consolidation is always available. To complete your student loan consolidation, you’ll need to gather information about your current loan(s). You’ll need to know the balances and interest rates of all your student loans, the names and addresses of the companies that hold your loans and the names and addresses of two personal references. If you don’t have this information readily available, the National Student Loan Data System (NSLDS) is a wonderful resource you can contact. The NSLDS holds the most complete and accurate information of federal loans.
Most student loan consolidation plans give you two options for paying back. In the first option, you are responsible for paying a standard amount each month. Payments include both principle and balance. This method of repayment results in the lowest cost of interest paid. The other student loan consolidation payment method is known as graduated repayment. In graduated repayment, the repayment process initially begins with low monthly payments that cover the interest only. Later, the monthly payment amount increases, and the principal is included in the amount paid.
Most repayment of student consolidation loans begins within 60 days of the disbursement of the loan. The payback term ranges from 10 to 30 years, depending on the amount of student debt being repaid and the repayment plan that has been chosen.
Before you decide on a student consolidation loan, be sure to ask a few key questions of your lender. Does the lender offer an assortment of plans for every income level and your specific needs? Does the lender provide any kind of interest-rate reduction, such as reductions for making payment online or on time? Does the lender demonstrate flexibility in customizing a loan to meet your specific circumstances? Does the lending company provide adequate customer service, with real-life representatives readily accessible? Do they offer the best interest rate out there? You should be able to answer all of these questions satisfactorily before going with a specific lender.
Although most individuals who seek out a student loan consolidation program have graduated already, you can also get a consolidation loan while you're in school. You must, however, be enrolled at least half time.
source:http://home.solveyourproblem.com/mortgage-loans/student-loan-consolidation.shtml
Most student consolidation loans have fixed interest rates that are based on the interest rates of the loans being consolidated. Studies have found that the amount you save by consolidating student loans can be very significant—up to 58 percent, according to some figures. What kind of student debt can be consolidated? Most federal aid, such as Federal Stafford loans, Federal Direct Loans, Federal Perkins loans, and many other types of student loans, qualify for consolidation. Many federal loans already have low fixed interest rates.
Before you proceed with consolidation, make certain the rate on your consolidated loan will indeed be lower than your current rate. The whole point of consolidation, after all, is to try to make the process of paying student debt easier, and hopefully, to pay less overall. Although consolidation can simplify loan repayment significantly and it does indeed lower your monthly payment, it also can increase the total cost of your student debt. Student loan consolidation provides lower monthly payments by giving the borrower up to 30 years to repay their loans. Thus, you'll be making more payments and pay more in interest. If you don't necessarily need monthly payment relief, you should compare the cost of repaying your unconsolidated loans against the cost of repaying a consolidation loan.
If you decide to proceed with consolidating your student loans, you’ll find the process to be very flexible. Whether you are a graduating senior, or have been paying off student loans for years, consolidation is always available. To complete your student loan consolidation, you’ll need to gather information about your current loan(s). You’ll need to know the balances and interest rates of all your student loans, the names and addresses of the companies that hold your loans and the names and addresses of two personal references. If you don’t have this information readily available, the National Student Loan Data System (NSLDS) is a wonderful resource you can contact. The NSLDS holds the most complete and accurate information of federal loans.
Most student loan consolidation plans give you two options for paying back. In the first option, you are responsible for paying a standard amount each month. Payments include both principle and balance. This method of repayment results in the lowest cost of interest paid. The other student loan consolidation payment method is known as graduated repayment. In graduated repayment, the repayment process initially begins with low monthly payments that cover the interest only. Later, the monthly payment amount increases, and the principal is included in the amount paid.
Most repayment of student consolidation loans begins within 60 days of the disbursement of the loan. The payback term ranges from 10 to 30 years, depending on the amount of student debt being repaid and the repayment plan that has been chosen.
Before you decide on a student consolidation loan, be sure to ask a few key questions of your lender. Does the lender offer an assortment of plans for every income level and your specific needs? Does the lender provide any kind of interest-rate reduction, such as reductions for making payment online or on time? Does the lender demonstrate flexibility in customizing a loan to meet your specific circumstances? Does the lending company provide adequate customer service, with real-life representatives readily accessible? Do they offer the best interest rate out there? You should be able to answer all of these questions satisfactorily before going with a specific lender.
Although most individuals who seek out a student loan consolidation program have graduated already, you can also get a consolidation loan while you're in school. You must, however, be enrolled at least half time.
source:http://home.solveyourproblem.com/mortgage-loans/student-loan-consolidation.shtml
Friday, January 4, 2008
Students Loan Debt Consolidation - Bankruptcy Is Not the Solution
You will be amazed to know that no matter what is the nature of your debt, there are all kinds of consolidation services available. If the major portion of your debts includes various student loans, it is always a good idea to go for the consolidation services available for students. Sometimes, people are so worried of the huge amount of dues that they owe to the various creditors that they choose to go for bankruptcy for the much desired debt relief.
However, here, you should note that the student loans are not dischargeable debts, as per the bankruptcy laws. Therefore, even if you choose to go for bankruptcy in order to settle it, you will remain liable to pay off the amount. This way, filing for bankruptcy cannot be a solution for such deeper debt problems. Only a student loan consolidation company can help you get rid of the debt problems in such cases. Following are some of the features of a good loan consolidation company that offers solutions for those who are unable to pay off the various loans.
Transfer Of Debt Related Worries
When you choose to go for consolidation service for student debt, the company takes all your financial worries. You are no longer required to deal with your creditors or the collection agencies. The debt management company will do this on your behalf. The company will talk to your creditors and try to reduce the overall amount of interest to a much lower amount. They will manage your amount overdue in a way that will help you pay off all your dues in a much shorter span of time that too at reduced consolidated monthly payments.
Regain Control Of Your Finances
Since, as per the consolidation program, you pay a much lower amount as monthly payment for all your dues associated the student loans, it leaves you with plenty of time that you can use to manage your finances and put it back on the profitable track. The good thing is that the credit counselor assigned to you by company providing you student debt consolidation services also works with you hand in hand, in managing your finances in a much better way. He or she educates you regarding the various ways to keep yourself away from getting into the nasty traps of dues again.
Last, but not the least, these programs not only offer you a chance to pay your dues at a faster pace, they also help you rebuild your credit score.
Student loans debt consolidation is specific kind of student debt consolidation services that deals with only debts associated with student loans. You should note that bankruptcy should not be the right solution for getting the debt relief. You should always try to get an alternate solution through a good student debt consolidation company. For more information visit student debt consolidation loans.
source:http://www.americanchronicle.com/articles/viewArticle.asp?articleID=47818
However, here, you should note that the student loans are not dischargeable debts, as per the bankruptcy laws. Therefore, even if you choose to go for bankruptcy in order to settle it, you will remain liable to pay off the amount. This way, filing for bankruptcy cannot be a solution for such deeper debt problems. Only a student loan consolidation company can help you get rid of the debt problems in such cases. Following are some of the features of a good loan consolidation company that offers solutions for those who are unable to pay off the various loans.
Transfer Of Debt Related Worries
When you choose to go for consolidation service for student debt, the company takes all your financial worries. You are no longer required to deal with your creditors or the collection agencies. The debt management company will do this on your behalf. The company will talk to your creditors and try to reduce the overall amount of interest to a much lower amount. They will manage your amount overdue in a way that will help you pay off all your dues in a much shorter span of time that too at reduced consolidated monthly payments.
Regain Control Of Your Finances
Since, as per the consolidation program, you pay a much lower amount as monthly payment for all your dues associated the student loans, it leaves you with plenty of time that you can use to manage your finances and put it back on the profitable track. The good thing is that the credit counselor assigned to you by company providing you student debt consolidation services also works with you hand in hand, in managing your finances in a much better way. He or she educates you regarding the various ways to keep yourself away from getting into the nasty traps of dues again.
Last, but not the least, these programs not only offer you a chance to pay your dues at a faster pace, they also help you rebuild your credit score.
Student loans debt consolidation is specific kind of student debt consolidation services that deals with only debts associated with student loans. You should note that bankruptcy should not be the right solution for getting the debt relief. You should always try to get an alternate solution through a good student debt consolidation company. For more information visit student debt consolidation loans.
source:http://www.americanchronicle.com/articles/viewArticle.asp?articleID=47818
Don't overlook federal student loans
In the Land of Oz, there are good witches and bad witches.
Likewise, in the land of borrowing, there's good debt and bad debt.
A home mortgage? Good debt, because the interest is tax-deductible, your home likely will rise in value over time, and you'll have a roof over your head.
A credit card loan to buy a pair of designer sandals? Bad debt, because credit card interest isn't deductible, your purchase will decline in value and you can't live in your shoes.
Student loans often are categorized as good debt, because a college education is considered a sensible long-term investment. In 2005, the typical full-time worker with a four-year college degree earned 62 percent more than an employee with only a high school diploma, according to the College Board. Many students can't afford to attend college without borrowing money.
Yet, it's important to understand not all student loans are alike. Federally guaranteed student loans, known as Stafford loans, have fixed interest rates - now 6.8 percent - and flexible repayment terms. Any full-time college student, regardless of family income, can take out a Stafford loan.
Private student loans, which often are offered by the same lenders that provide federal loans, are more expensive. Interest rates are variable, so there's no limit on how high they can go. Repayment terms aren't as flexible as they are for federal loans.
Yet, despite these drawbacks, private student loan borrowing has soared in the past decade. Last year, private loans accounted for 29 percent of all loans taken out by undergraduates, according to a report released by the College Board.
The amount of federal money students can borrow is limited, and those limits haven't kept up with increases in college costs. As a result, some students who attend high-cost schools rely on private loans to pay for expenses not covered by their federal loans.
That doesn't entirely explain the growth in private loans. An analysis by the American Council on Education found one in five undergraduates with private loans didn't first take full advantage of federal loans.
So why do borrowers take out higher-cost loans? Marketing probably plays a role. Many lenders advertise private loans on television and over the Internet. The U.S. Public Interest Research Group, a consumer advocacy group, has charged that some of these ads are misleading and entice borrowers to take out unnecessarily high-risk, high-cost loans. In September, New York Attorney General Andrew Cuomo expanded his investigation of the student-loan industry to include lenders and companies that use direct-marketing campaigns to promote their loans. Major private lenders say they encourage borrowers to take advantage of federal loans before taking out any private loans.
In addition, recent cuts in government subsidies have made federal loans less profitable for lenders. Consequently, lenders may become even more aggressive in marketing their private loans, said Stephen Burd, senior research fellow for the New America Foundation, a policy institute.
Ads for private loans often point out that borrowers don't have to start repaying the loans until six months after graduation. What they fail to mention is this feature isn't unique to private loans. Repayments on federal student loans, too, are deferred until six months after graduation.
Many ads for private loans also claim loan applicants can get their money in less than a week. By contrast, Stafford loan borrowers must fill out a Free Application for Federal Student Aid, which is eight pages long and contains more than 100 questions.
While the Free Application for Federal Student Aid takes time, it's time well spent. Congress recently added some important benefits to the federal student loan program. Under a $20 billion financial aid bill enacted last month, Stafford loan borrowers will never have to spend more than 15 percent of their discretionary income on loan payments.
The law also gradually reduces interest rates over the next four years for new federally subsidized Stafford loans, which are available to borrowers who can show financial need. The government pays the interest on subsidized Stafford loans while the borrower is in school.
In addition, borrowers who work in certain public-service jobs for at least 10 years will be eligible to have the balance of their student loans forgiven. This relief will be available only to borrowers with federal loans.
"There seems to be no reason for students to take out private loans without exhausting their federal eligibility first," Burd notes. "Federal loans are much cheaper and have many more protections."
source:http://www.saukvalley.com/articles/2008/01/03/features/personal_finance/305712273195186.txt
Likewise, in the land of borrowing, there's good debt and bad debt.
A home mortgage? Good debt, because the interest is tax-deductible, your home likely will rise in value over time, and you'll have a roof over your head.
A credit card loan to buy a pair of designer sandals? Bad debt, because credit card interest isn't deductible, your purchase will decline in value and you can't live in your shoes.
Student loans often are categorized as good debt, because a college education is considered a sensible long-term investment. In 2005, the typical full-time worker with a four-year college degree earned 62 percent more than an employee with only a high school diploma, according to the College Board. Many students can't afford to attend college without borrowing money.
Yet, it's important to understand not all student loans are alike. Federally guaranteed student loans, known as Stafford loans, have fixed interest rates - now 6.8 percent - and flexible repayment terms. Any full-time college student, regardless of family income, can take out a Stafford loan.
Private student loans, which often are offered by the same lenders that provide federal loans, are more expensive. Interest rates are variable, so there's no limit on how high they can go. Repayment terms aren't as flexible as they are for federal loans.
Yet, despite these drawbacks, private student loan borrowing has soared in the past decade. Last year, private loans accounted for 29 percent of all loans taken out by undergraduates, according to a report released by the College Board.
The amount of federal money students can borrow is limited, and those limits haven't kept up with increases in college costs. As a result, some students who attend high-cost schools rely on private loans to pay for expenses not covered by their federal loans.
That doesn't entirely explain the growth in private loans. An analysis by the American Council on Education found one in five undergraduates with private loans didn't first take full advantage of federal loans.
So why do borrowers take out higher-cost loans? Marketing probably plays a role. Many lenders advertise private loans on television and over the Internet. The U.S. Public Interest Research Group, a consumer advocacy group, has charged that some of these ads are misleading and entice borrowers to take out unnecessarily high-risk, high-cost loans. In September, New York Attorney General Andrew Cuomo expanded his investigation of the student-loan industry to include lenders and companies that use direct-marketing campaigns to promote their loans. Major private lenders say they encourage borrowers to take advantage of federal loans before taking out any private loans.
In addition, recent cuts in government subsidies have made federal loans less profitable for lenders. Consequently, lenders may become even more aggressive in marketing their private loans, said Stephen Burd, senior research fellow for the New America Foundation, a policy institute.
Ads for private loans often point out that borrowers don't have to start repaying the loans until six months after graduation. What they fail to mention is this feature isn't unique to private loans. Repayments on federal student loans, too, are deferred until six months after graduation.
Many ads for private loans also claim loan applicants can get their money in less than a week. By contrast, Stafford loan borrowers must fill out a Free Application for Federal Student Aid, which is eight pages long and contains more than 100 questions.
While the Free Application for Federal Student Aid takes time, it's time well spent. Congress recently added some important benefits to the federal student loan program. Under a $20 billion financial aid bill enacted last month, Stafford loan borrowers will never have to spend more than 15 percent of their discretionary income on loan payments.
The law also gradually reduces interest rates over the next four years for new federally subsidized Stafford loans, which are available to borrowers who can show financial need. The government pays the interest on subsidized Stafford loans while the borrower is in school.
In addition, borrowers who work in certain public-service jobs for at least 10 years will be eligible to have the balance of their student loans forgiven. This relief will be available only to borrowers with federal loans.
"There seems to be no reason for students to take out private loans without exhausting their federal eligibility first," Burd notes. "Federal loans are much cheaper and have many more protections."
source:http://www.saukvalley.com/articles/2008/01/03/features/personal_finance/305712273195186.txt
The Free Market Myth Dissolves into Chaos
With each new revelation of multi-billion dollar losses from the largest Wall Street firms, there has been this nagging question as to how these Masters of the Universe got stuck with these massive write-downs. Isn't Wall Street supposed to execute trades for others; not build huge inventories of toxic, non-trading securities for themselves?
Given that these big Wall Street players now own some of our largest, taxpayer insured, depositor banks (courtesy of a legislative gift from Congress called the Gramm-Leach-Bliley Act) and the Federal Reserve is shoveling tens of billions of our dollars into some very big black holes, common sense might suggest that Congress would be holding public hearings. These hearings might shed light on how Wall Street has, under the cloak of darkness, mutated from a trading venue to manufacturing and warehousing exotic concoctions registered offshore.
So far, Congress has shown only cursory interest in the details. The Bush administration is spinning the mess as a subprime mortgage problem lest the public figure out that a $1 Trillion unregulated market has blown up under the free market noses of this administration.
Collectively losing $70 Billion in a matter of months with projections of ongoing losses climbing to as much as $400 Billion globally sounds like serious trouble to me. And, it's very uncharacteristic of Wall Street to lose billions of its own money.
Typically, they know long before the general public that a bust is coming (because they are the ones who sowed the seeds for the bust) and dump their losses on less knowledgeable market participants, usually the small investor. Since they are now stuck with mega losses themselves, wouldn't that have to mean that they are the least knowledgeable market participants?
Before we break out the bubbly over Wall Street finally getting a taste of how it feels to be mauled, reflect on what it might mean to average Americans if the least knowledgeable market participants own the banks that hold their savings, money market, car loan, credit card, mortgage; and these firms' stocks are loaded up in 401(k) plans.
The first clue to the mega losses is a three letter acronym, CDO. That stands for Collateralized Debt Obligation; a financial instrument so convoluted that even veteran business writers are having difficulty getting their brains around it.
A good analogy to visualize a CDO is the episode of the sitcom Friends where Rachel tries to make an English trifle for dessert on Thanksgiving. She puts in the requisite layers of custard and jam but when she turns the cookbook page to continue the recipe for the layers, she is unaware that the pages are stuck together and she completes the dessert with the recipe for Shepherd's Pie. The final product is an indigestible concoction of multi layers of custard, jam, ground beef, sautéed peas and onions.
English trifles are typically served in a clear glass bowl to show off the exquisite layers. Wall Street prefers opaque pottery for its CDOs.
From 2002 through 2006, big manufacturing plants run by the largest Wall Street firms, along with some smaller players, churned out CDO trifles in the cumulative amount of over $1 trillion; half of that was pumped out in just 2006.
The recipe was quite flexible. Layers (called tranches on Wall Street) could consist of student loans, credit card receivables, auto loans, commercial or residential real estate loans, subprime mortgages or corporate loans. Layers could also be highly leveraged bets on indices (Synthetic CDOs) or pieces of other CDOs (CDOs squared). Beginning in 2003, a growing percentage of CDOs were assembled with just one asset class: residential mortgages; frequently using subprime mortgages and home equity loans as the predominant collateral.
While the layers were being assembled, the pieces sat in what Wall Street calls its warehouse operation. Once the CDO was assembled in the opaque pottery bowl, only the whipped cream was showing at the top. The rating agencies, Standard and Poor's, Moody's and Fitch gave the indigestible concoction a AAA rating based on that whipped cream. That the rating was requested and paid for by the issuer of the CDO was no trifling matter, as future events would expose. Even as the ground beef and sautéed peas (junk debt) began to rot in the underlying layers, the concoction maintained its AAA rating. (Only in 2007, after think tanks began to expose the chicanery and markets began to seize up did the rating agencies begin to downgrade the ratings.)
Five years went by with the so-called "efficient market" stumbling around in the darkness of fantasy ratings, failing to ponder the obvious questions about these AAA instruments. Questions, such as:
How could a layered concoction of questionable debt pools, many of dubious origin, achieve the equivalent AAA rating as U.S. Treasury securities, backed by the full faith and credit of the U.S. government, and time-tested over a century of panics, crashes and the Great Depression? (Despite the political rogues that come and go in Washington, we, the American people, show an inordinate and historical willingness to suffer fools and still pay our income taxes for the greater good of our fellow citizens. It doesn't hurt either that, in most cases, the tax is removed from our paycheck before we get it.)
How could an opaque instrument made up frequently of more than 100 hard to track pieces be safe enough for pension funds, insurance company funds and, disguised as commercial paper, stashed to the tune of over $50 billion in Mom and Pop money market funds?
How did a 200-year old "efficient" market model that priced its securities based on regular price discovery through transparent trading morph into an opaque manufacturing and warehousing complex of products that didn't trade or rarely traded, necessitating pricing based on statistical models?
source:http://www.opednews.com/articles/opedne_pam_mart_080103_the_free_market_myth.htm
Given that these big Wall Street players now own some of our largest, taxpayer insured, depositor banks (courtesy of a legislative gift from Congress called the Gramm-Leach-Bliley Act) and the Federal Reserve is shoveling tens of billions of our dollars into some very big black holes, common sense might suggest that Congress would be holding public hearings. These hearings might shed light on how Wall Street has, under the cloak of darkness, mutated from a trading venue to manufacturing and warehousing exotic concoctions registered offshore.
So far, Congress has shown only cursory interest in the details. The Bush administration is spinning the mess as a subprime mortgage problem lest the public figure out that a $1 Trillion unregulated market has blown up under the free market noses of this administration.
Collectively losing $70 Billion in a matter of months with projections of ongoing losses climbing to as much as $400 Billion globally sounds like serious trouble to me. And, it's very uncharacteristic of Wall Street to lose billions of its own money.
Typically, they know long before the general public that a bust is coming (because they are the ones who sowed the seeds for the bust) and dump their losses on less knowledgeable market participants, usually the small investor. Since they are now stuck with mega losses themselves, wouldn't that have to mean that they are the least knowledgeable market participants?
Before we break out the bubbly over Wall Street finally getting a taste of how it feels to be mauled, reflect on what it might mean to average Americans if the least knowledgeable market participants own the banks that hold their savings, money market, car loan, credit card, mortgage; and these firms' stocks are loaded up in 401(k) plans.
The first clue to the mega losses is a three letter acronym, CDO. That stands for Collateralized Debt Obligation; a financial instrument so convoluted that even veteran business writers are having difficulty getting their brains around it.
A good analogy to visualize a CDO is the episode of the sitcom Friends where Rachel tries to make an English trifle for dessert on Thanksgiving. She puts in the requisite layers of custard and jam but when she turns the cookbook page to continue the recipe for the layers, she is unaware that the pages are stuck together and she completes the dessert with the recipe for Shepherd's Pie. The final product is an indigestible concoction of multi layers of custard, jam, ground beef, sautéed peas and onions.
English trifles are typically served in a clear glass bowl to show off the exquisite layers. Wall Street prefers opaque pottery for its CDOs.
From 2002 through 2006, big manufacturing plants run by the largest Wall Street firms, along with some smaller players, churned out CDO trifles in the cumulative amount of over $1 trillion; half of that was pumped out in just 2006.
The recipe was quite flexible. Layers (called tranches on Wall Street) could consist of student loans, credit card receivables, auto loans, commercial or residential real estate loans, subprime mortgages or corporate loans. Layers could also be highly leveraged bets on indices (Synthetic CDOs) or pieces of other CDOs (CDOs squared). Beginning in 2003, a growing percentage of CDOs were assembled with just one asset class: residential mortgages; frequently using subprime mortgages and home equity loans as the predominant collateral.
While the layers were being assembled, the pieces sat in what Wall Street calls its warehouse operation. Once the CDO was assembled in the opaque pottery bowl, only the whipped cream was showing at the top. The rating agencies, Standard and Poor's, Moody's and Fitch gave the indigestible concoction a AAA rating based on that whipped cream. That the rating was requested and paid for by the issuer of the CDO was no trifling matter, as future events would expose. Even as the ground beef and sautéed peas (junk debt) began to rot in the underlying layers, the concoction maintained its AAA rating. (Only in 2007, after think tanks began to expose the chicanery and markets began to seize up did the rating agencies begin to downgrade the ratings.)
Five years went by with the so-called "efficient market" stumbling around in the darkness of fantasy ratings, failing to ponder the obvious questions about these AAA instruments. Questions, such as:
How could a layered concoction of questionable debt pools, many of dubious origin, achieve the equivalent AAA rating as U.S. Treasury securities, backed by the full faith and credit of the U.S. government, and time-tested over a century of panics, crashes and the Great Depression? (Despite the political rogues that come and go in Washington, we, the American people, show an inordinate and historical willingness to suffer fools and still pay our income taxes for the greater good of our fellow citizens. It doesn't hurt either that, in most cases, the tax is removed from our paycheck before we get it.)
How could an opaque instrument made up frequently of more than 100 hard to track pieces be safe enough for pension funds, insurance company funds and, disguised as commercial paper, stashed to the tune of over $50 billion in Mom and Pop money market funds?
How did a 200-year old "efficient" market model that priced its securities based on regular price discovery through transparent trading morph into an opaque manufacturing and warehousing complex of products that didn't trade or rarely traded, necessitating pricing based on statistical models?
source:http://www.opednews.com/articles/opedne_pam_mart_080103_the_free_market_myth.htm
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