What is college loan consolidation? Going to college is one of the most important steps in one’s life, but it is also one of the most expensive ones. Nowadays, nearly everybody who goes to college has to borrow money from some lender – parents, the federal government, or private institutions.
When one has multiple lenders and is heavily in loan over college loans, there is not much to be done but start repaying them one by one, or to consolidate them.
There are many programs aimed at helping present or former students to consolidate their loans. College loan consolidation has the indisputable advantage that it is easier to manage one loan than multiple ones. Also, since interest rates have fallen, consolidating many loans into a single, low-interest one is a way to decrease the gross payment for college.
When you start college loan consolidation, first examine their sources. A rule of thumb is that federal loans, which generally have lower interest rates, are never consolidated with loans from private sources.
Also, the amount of money that you owe is another issue to consider. Many loan consolidation companies do not deal with amounts less than USD 10,000, while others do not have a minimal requirement. Other companies have eligibility requirements so that only graduates can use their services.
By consolidating your college loans now, you can achieve one more thing – extend the term for payment to 15 or even 30 years. This can be a partial solution for you, if you now don’t have the money to pay it, but bear in mind that by extending the term you will pay much more interest.
With all that said, the decision whether to consolidate or not is solely up to you. Sometimes it proves that the charges for the consolidation exceed the drop in interest, so think twice before you consolidate!
When you remortgage, you are switching your mortgage to another deal, and frequently another lender.
Remortgages can be used for various reasons, most people simply switch mortgage because it will work out cheaper for them.
For example, the introductory discounted interest rate may have finished with your current lender; therefore you could get a discount, or a lower APR, with another lender.
Other individuals may use a re-mortgage to consolidate their debts, if they take out their remortgage for a larger amount than owed on the existing mortgage.
If you are looking to replace your existing mortgage for one with lower repayments please fill out our quick enquiry form.
It is possible to remortgage up to 95% of your property. If you have already paid off a large proportion of your mortgage, it may be better for you to consider an Equity Release Plan rather than a re-mortgage.
Getting a remortgage is something that almost all mortgage borrowers have to do, apart from those that make enough money to pay off all of their loan at once, or those rare borrowers who choose long-term fixed-rate mortgages. The remortgage process is relatively simple, and many borrowers remortgage once every couple of years to get the best rates. Studies have indicated that those who remortgage regularly are likely to spend less on interest over the life of their loans compared to those who allow their mortgage to revert to standard variable rates.
Why remortgage?
Whether you have a fixed-rate mortgage, a tracker mortgage or another type of discount rate, your mortgage will likely be set at a special rate for a limited period of time. Typical examples include a two-year fixed-rate mortgage or a three-year tracker mortgage. When this special period comes to an end, mortgage holders have to choose a new deal or their mortgage will revert to the lender’s standard variable rate, usually considerably higher than special deals.How does a remortgage work?
Mortgage holders search for the most competitive loan possible to choose where to remortgage to. Depending on the near future, different mortgage products will represent better or worse value, and it is up to the consumer to predict this or rely on an independent financial adviser.For instance, if interest rates are to climb during the special deal period, a fixed-rate mortgage will protect the borrower from rate rises and ensure a guaranteed level of repayments. However, if interest rates are going to fall, a tracker mortgage will follow Bank of England base rate down, potentially providing cheaper mortgage repayments. Other special deals such as variable rates and discounted rates may represent good value for some borrowers.
Types of student loans
There are several types of loans available to students. The simplest categorization is into federal student loans and private loans. Federally funded loans are administered initially through the US Department of Education's Federal Student Aid programs, and are usually the easiest to get student loan consolidation services for. These federal programs disburse about $60 billion a year in loans, work-study support and grants. Stafford loans are the most common form of federal loans for students, but there are a variety of other federal payment plans - among them military / ROTC plans to pay for college.Private student loans are administered by standard lending institutions. Among the most common are Citibank student loans and the Sallie Mae Signature student loans. These lenders are basically providing unsecured (or in some cases secured) loans to you as a student, and will most often charge higher interest rates than their federal counterparts.
Private and federal loans, along with scholarships, can be combined to fund your education. However, it's important that when it comes time to consolidate student loans, you do not mix the two types together. You should always consolidate your federal loans first, then separately consolidate private student loan debt. The benefits of consolidating your federal loans include: a lower interest rate (usually, but keep in mind that interest rates change every July 1), increasing the time for loan repayment to 30 years which reduces your monthly costs, and reducing the number of lending institutions you send checks to every month. For a more complete discussion of this topic and consolidation eligibility criteria, visit our page on how to consolidate student loans. Medical student loans fall into a special class, and are discussed on our medical school loans page.
Trends for student loans
Nearly 50% of recent college graduates took out student loans, with an average borrowed around $10,000 (1). Until recently, student loan interest rates ran between 6-8%. Recently, though, rates have fallen very low. As of fall 2003, Stafford loan interest rates were in 3-4% range (2).Students who currently have loans, either a single loan or multiple loans, have a variety of options for reducing their payments and indebtedness. Because interest rates have fallen, loans can be consolidated or in some cases refinanced. When you're considering refinancing student loans or student loan consolidation, you need to compare interest rates before you consolidate federal student loans.
Effects of student debt
Like any debt, student loans can influence your credit and your future decisions. Students who borrowed a substantial amount for college (more than $5000) are less likely to pursue higher education (1). In addition, student loan debt that exceed 8% of your income can be seen negatively when your credit gets assessed for future loans (this is especially true if you have one or more defaulted student loans).Two ways to reduce the debt burden are: 1) reduce or eliminate the principal balance. Specific types of loans can sometimes be forgiven by service or other higher education - look into the specific student loan program you have. 2) Reduce your monthly payment. Since debt burden is measured by comparing your loan payment to your income, reducing your payment helps your credit evaluation.
There are very many companies who will buy structured settlements. In order to be in touch with such companies, you should be able to know which ones are genuine and which ones are scams.
Due to the rise in the level of con artists, care should be taken when choosing a company which will buy structured settlements.
Just like any other business, research is the key in finding out what you need to be done in order to have your structured settlements bought. The first step would be to find out how many companies buy structured settlements.
The number of companies that you find that are able to do this kind of business will determine the options that you have.
The more companies that are there, the higher the chances of you getting a very good deal on these settlements.
Once you have found out which companies are in this business, it will be up to you to know which ones are genuine and which ones are not.
You can research this through their websites. The best option however would be to go physically to their offices and make general inquiries.
From the information that you get you will be able to determine if they are genuine or not.
You can make inquiries around to find out how long they have been in business. The longer they have been working, the higher the chance of them being genuine.
Another key aspect that one should be seriously considering is what percentage of their clients has had issues with them in the past.
If the percentage of disgruntled clients is high, then it would be advisable to avoid that particular company.
Before making a decision, analyze all the data that you have compiled from each company. This will help you to know which the best is and which company offers a great price.
Having done all this, you will now be able to get a very good deal on your structured settlement. Following these procedures will help you get a very good company that will be able to buy structured settlements from you.
If you fall into any difficulties, try consulting with a financial advisor because they will be able to help you in this field.
Alternatively, you can inquire from family or friends that may know someone who has successfully done such a business before.
Many people who have obtained structured settlements through their personal injury or workers' compensation claims wonder if they should try to sell their settlement in return for a lump sum payment. This may be a relatively modest curiosity, piqued by an advertisement announcing "It's your money!" and promising cash payment. Or it may be based upon an immediate need for funds. However, selling a structured settlement is not always possible, and it is not necessarily an economically wise decision.
Your Structured Settlement Should Work For You
The best time to decide that a structured settlement is not right for you is before you consent to such a settlement. You may wish to press for a lump sum settlement, for periodic lump sum payments in addition to smaller annual payments, or for a lump sum to be issued at a future date when you anticipate a particular need. If you work out a settlement package that is in your best interest at the outset, you will be able to maximize the value of your settlement and get the greatest tax benefit from the structured portion of any settlement.
Remember that the companies which purchase structured settlements intend to profit from the purchase of your settlement. Their profit comes out of the payments you would otherwise receive.
Recall also that if your future earning capacity is impaired as a result of your injury, you should consider your future needs when you are making any decision regarding the sale of your settlement.
Restrictions on Selling Settlements
There are laws in approximately two thirds of the states which restrict the sale of structured settlements, and additional federal regulations apply to the sale of structured settlements. You should expect to have to obtain court approval for the sale, and most states have statutes in effect which regulate the transfer process. The insurance company that issued the annuities for the structured settlement may refuse to cooperate with the sale of a settlement, citing policy language and asserting that payments cannot be assigned.Tax Consequences
As a typical structured settlement is designed to provide significant tax advantages to the injured plaintiff, there can be significant tax consequences associated with selling part or all of a settlement. It may be that, while payments made under the settlement were not taxed, the lump sum received through the sale of the settlement will be taxed.Shop Around For Offers
If you are approached about selling your settlement, or are looking for a buyer, don't take the first offer you receive. You will almost always benefit from consulting with different brokers or buyers in relation to your settlement. You should also take care that you are working with an established, reputable buyer.Consult A Lawyer
It is wise to consult a lawyer in relation to the sale of your settlement before signing a contract. A lawyer can help ensure that your rights are protected, and that you will not be subject to consequences for events outside of your control, for example if the company which purchases your settlement is later unable to collect payments from the insurance company which issued the annuities in your settlement package. A lawyer will be able to tell you if the terms of the purchase agreement are reasonable, and may also be able to advise you as to whether the offer made for your settlement is adequate.While it is true that you can trade in margins to make more money in less time, it is not generally advised to be a good bet for beginners. However if you are familiar with the stock market and how it works, you have to start somewhere with margin trading. So let's take a look at some of the basics and go from there.
With normal trading you trade using things you own. But with margin trading you are borrowing what you trade with from your broker. This means that there is more potential for things to go wrong. It's easy to borrow more than you can afford to pay back because you don't have to pay for it initially. But be aware that if anything goes wrong you could end up owing a lot of money in a very short amount of time.
This is why margin trading for beginners is not strictly a good idea. With other forms of stock trading you can only lose what you have. So if you have $1,000 in shares and it all goes horribly wrong you only lose that $1,000. If you are involved in margin trading though you could end up losing a lot more than that.
The best way to start is to find out all you can about how it works. You also need to be very aware of the potential for losses. Getting involved without having this understanding is liable to make you head for disaster.
Leverage is another aspect you need to be familiar with. Basically if you are holding $1,000 in shares and you think you are going to be making a good profit on them, you know you could make more profit if you had more shares. By borrowing from your broker you can realize that amount of profit, without holding the shares yourself.
If the market is good you can indeed make more money by margin trading. But if the market doesn't go in your favor it will lead to your losses mounting up a lot more quickly. This is where people go wrong and end up owing a lot of money.
So the trick here is to know exactly what you are doing and not to be tempted by ifs and maybes. If you are tempted in this way then margin trading may not be suitable for you at all.
Article Source: http://EzineArticles.com/?expert=Ben_Lardes
What Is a Structured Settlement?
Sometimes when a plaintiff settles a case for a large sum of money, the defendant, the plaintiff's attorney, or a financial planner consulted in association with the settlement, will propose paying the settlement in installments over time rather than in a single lump sum. When a settlement is paid in this manner it is called a "structured settlement". Often the structured settlement will be created through the purchase of one or more annuities, which guarantee the future payments.A structured settlement can provide for payment in pretty much any schedule the parties choose. For example, the settlement may be paid in annual installments over a number of years, or it may be paid in periodic lump sums every few years.
Benefits of a Structured Settlement
A structured settlement can protect a plaintiff from having settlement funds dissipated, when they are necessary to pay for future care or needs. Sometimes a structured settlement can help protect a plaintiff from himself - some people simply aren't good with money, or can't say no to relatives who want to "share the wealth", and even a large settlement can be rapidly exhausted. Minors may benefit from a structured settlement as well, such as a settlement which provides for certain costs during their youth, an additional disbursement to pay for college or other educational expenses, and then one or more disbursements in adulthood. An injured person who has long-term special needs may benefit from having periodic lump sums with which to purchase medical equipment or modified vehicles.
In some situations, it will be better for a severely disabled plaintiff to set up a special needs trust, rather than entering into a lump sum or structured settlement. Any plaintiff who is receiving, or expects to receive, Medicaid or other public assistance, or the guardian or conservator entering into a settlement on behalf of a disabled ward, should consult with a disabilities financial planner about their situation before choosing any particular settlement option or structure.
Potential Disadvantages of Structured Settlements
Some people who enter into structured settlements feel trapped by the periodic payments. They may wish to purchase a new home, or other expensive item, yet be unable to muster the resources because they can't borrow against future payments under their settlement.Some people will do better by accepting a lump sum settlement, and investing it themselves. Many standard investments will give a greater long-term return than the annuities used in structured settlements.
Selling a Structured Settlement
If you have a structured settlement, you may have been approached by a company interested in purchasing your settlement, or may be curious about selling your settlement in return for a lump sum buyout. About two thirds of states have enacted laws which restict the sale of structured settlements, and tax-free structured settlements are also subject to federal restrictions on their sale to a third party. Also, some insurance companies will not assign or transfer annuities to third parties, to discourage the sale of structured settlements. As a consequence, depending upon where you live and the terms of your annuities, it may not be possible for you to sell your settlement.Keep in mind that companies which buy structured settlements intend to profit from their purchase, and sometimes their offers may seem quite low. You may benefit from approaching more than one company in relation to the sale of your settlement, to make sure that you obtain the highest payoff. You also want to be sure that the company which wants to buy your settlement is established, well-funded, and reputable - you don't want a fly-by-night outfit to obtain the rights to your annuities but to disappear or go bankrupt before paying you the buyout money. You may have to go to court to get a judge to approve the buyout. It is usually a good idea to consult with a lawyer before entering into an agreement to sell your settlement.
Special Considerations
Any person entering into a structured settlement should be on guard for potential exploitation in relation to the settlement:Excessive Commissions
- Annuities can be highly profitable for insurance companies, and they often carry very large commissions. It is important to ensure that the commissions charged in setting up a structured settlement don't consume an inappropriate percentage of its principal.
Overstated Value
- Sometimes, after negotiating a particular settlement figure, the defense will overstate the value of a structured settlement. As a result the plaintiff, in accepting the settlement, in fact obtains a significantly lower dollar value than was agreed upon. Some defendants have nominally paid the full amount of the settlement, knowing that they would later obtain significant rebates from the annuity companies they used. Plaintiffs should consider compariing the fees and commissions charged for similar settlement packages by a variety of insurance companies, to make sure that they are in fact getting full value. A plaintiff may wish to make it a condition of the settlement that the defendant will actually pay the full value of the settlement in setting up the structured settlement, and that any rebates received by the defendant for annuities included in the settlement be payable to the plaintiff.
Self-Dealing
- There have been cases where the plaintiff's lawyer is also in the insurance business, and sets up a structured settlement on behalf of a client without disclosing that the attorney is purchasing the annuities from his own business, or is pocketing a large commission on the annuities. Similarly, there have been situations where the plaintiff's attorney has referred the client to a particular financial planner to set up a structured settlement, without disclosing that the financial planner will be paying the attorney a referral fee in relation to the client's account. Make sure that you know what financial interest, if any, your lawyer has in relation to any financial services sold or recommended by the lawyer.
Life Expectancy
- It is unfortunate, but many people who receive large personal injury or workers' compensation settlements will have a shortened life expectancy as a result of their injuries. It is important to consider life expectancy in association with any structured settlement, and to consider whether it is appropriate to enter into an annuity where payments will cease upon death. Sometimes it will make sense to insist upon an annuity that pays a minimum number of payments, or one that will pay a balance into the plaintiff's estate, such that the value of the settlement is not lost to an insurance company upon the plaintiff's untimely death.
Using Multiple Insurance Companies
- For larger settlements, it often makes sense to purchase annuities for a structured settlement from several different companies, dividing the settlement between those companies. This can provide you with protection in the event that a company that issued annuities for your settlement package goes into bankruptcy - even in the event that one of the companies defaults in part or in full on your settlement payments, you would still receive full payment from the other companies.
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