So, you’re ready to go to college. It’s an exciting time, until you realize just how much it’s going to cost. If your parents prove unable or unprepared to pay for your college education, you will be left to do it yourself. Moreover, no matter how you look at it, your student loan is just like any other loan for a car, a mortgage, or any other major purchase.
Even though you can wait to begin paying it back after you’ve graduated, it will still be there waiting for you. Student loans will never go away until repaid, and you cannot discharge the items through bankruptcy either. If you are like most beginning college students, you fall into the category of seeking student loans for students with bad credit, mostly because young college students have already obtained credit cards and may have hurt their credit by misusing the privilege or simply do not have any credit records in your name. If this describes you, you are not alone and there is a solution.
Two types of student loans for students with bad credit exist: federal student loans and private student loans. To boil these loans down to their basic parts, federal student loans are guaranteed by the federal government. Federal student loans impose limits on how much you can borrow. Private student loans, on the other hand, are generally offered by banks or other financial institutions, and when it comes to student loans for students with bad credit prove even more difficult to obtain due to stringent credit inspections.
Current interest rates on student loans for students with bad credit include:
•Direct Perkins Loans – 5.0% for 2013 academic year
• Direct Stafford Loans – 6.8% for 2013 academic year
• Direct Graduate PLUS Loans – 7.9% for 2013 academic year
• Personal loans – varies depending on lender
• Online peer-to-peer loans – varies depending on lender
• Credit card loans – varies, approximately 20 % to 30% for students with bad credit
• Company sponsored – generally none, but requires contract commitments
Take into account the fact that financial aid offices of colleges have students’ best interests at heart when it comes to assisting the student with making the right decisions about financing their college education. Sometimes, however, being able to utilize the optimally rated loans is not feasible, and in these cases, guidance and financial aid counselors will direct students to costlier, but all around just as effective methods of financing collegiate educations.
Student loans for students with bad credit must be paid back regardless of personal bankruptcy filings, and failing to repay student loans can lead to wages being garnish and credit being completely tarnished. In addition, interest on all loans accrues over time, and the final repayment amount loans are vastly larger than the principle loan award.
Students can utilize the financial aid calculator to ascertain an accurate picture of their monthly, as well as cumulative, repayments needed to rectify borrowed loans. Student loans for students with bad credit often charge more interest than for students with good credit, or even with no credit at all, so look at the loan from end to end before making borrowing decisions. If the entire spectrum of the student lending process is overwhelming, please do not hesitate to contact for further assistance locating student loans for students with bad credit.
INCOME CONTINGENT STUDENT LOANS
The term “income contingent” means something important to today’s college and university students and recent graduates, especially those concerned about borrowing student loans. If you’re worried about how you will repay your student loans after graduation, you should read this article.
It is common for graduates in the post-recession economy to experience difficulty in finding a job. You might feel like you have to accept a salary considerably below your earning potential and education level, especially a job in the public or nonprofit sector. Several years ago, the U.S. federal government created a new generation of “income contingent” student loans which can help college and university graduates like you to manage student loan repayment.
An income contingent loan is a student loan that you can repay based on the amount of money you make in your post-graduate employment. This type of student loan gives a commercial lender some measure of protection against your default on the loan, but it also requires you to repay what you’ve borrowed within your ability to pay.
Federal guidelines administered by the U.S. Department of Education (DOE) have established that the size of a student’s monthly repayment amount can be adjusted according to income level. If a student does not earn the right level of income after college, he or she obtains a form of economic relief. It’s important to note that parent loans your parents might have borrowed under the PLUS program are not eligible for these repayment provisions.
As a student or former student, you can use the DOE’s government’s income contingent repayment calculator to estimate your monthly payments. Note that you will need important loan information including the amount of the loan and the interest rate. You also need to know your adjusted gross income, whether you’re married or head of household, and your family size; these last three are based on how you file federal income taxes with the Internal Revenue Service.
You can verify the amount of interest you must repay on student loans by reviewing your student loan paperwork. However, you can also calculate student loan interest based on national standardized amounts for certain years. According to the U.S. Department of Education, subsidized undergraduate student loans first disbursed between 7/1/08 and 6/30/09 will have an interest rate of 6.00 percent. Loans first disbursed between 7/1/09 and 6/30/10 will have 5.60 percent interest, and loans first disbursed between 7/1/10 and 6/30/11 will have 4.50 percent interest.
Find out what you need to know about income contingent student loan repayment before you accept a low salary after graduation. You want to be able to meet your student loan obligations to preserve your personal credit rating.