Direct Consolidation Loans - From Standard Plan To Income Contingent Repayment Plan

Prepare for your studies, the most common and convenient way to get a loan is student loan. However, upon your graduate, its time to start paying it off and you must always be prepared for it. As a student, one of the best options is getting a Direct Consolidation Loan. This option not only benefits students but also available to working adults. The following paragraphs will review the different types of payment plans and benefits for Direct Consolidation Loan.

Simplification is the obvious advantage for consolidation loans for those people who have several different student loans. Convenience is the key pointer to people with many different student loans. By uniting them under a single Direct Consolidation Loan, repaying the loan becomes more easily manageable, because you only have to make one payment instead of several different ones. You will have four different types of payment plans to choose, two of which will take into account your income.

You dont require to have graduated to take advantage of Direct Consolidation Loan. Under such loan, it is common to have granted a lower interest rate than those people who refinance after they have graduated. Maybe up to 0.6% lower.

Standard Repayment Plan

Borrowers who choose the Standard Repayment Plan must adhere to the requirement - at least pay a minimum of $50 per month. The maximum lifespan is ten years. Those people with higher income may choose the Standard Repayment Plan because borrowers pay the least interest compared to all the four plans with only ten years term. Lets take an example if a borrower loan $15,000 for his studies with 8.25% interest rate for ten years. The repayment is $184 for 120 months, that is equal to a total of $22,077. That means $7,077 of interest he has to pay for the whole term, and is considered the lowest interest as compared to all the other plans with longer term.

Extended Repayment Plan

The Extended Repayment Plan is slightly flexible than the Standard Plan. With the same minimum payment of at least $50 per month, the repayment can be extended between 12 to 30 years. The period varies according to the total amount of the debt. This plan benefits borrowers for larger amount of debts with lower fixed payment and up to 30 years of repayment term. Lets take the same example of $15,000 loan with 8.25% interest rate over 15 years of $146 monthly payment. That will be equal to $26,196. Sure, under the Extended Repayment Plan the interest borrowers have to pay will be higher than the Standard Plan.

Graduate Repayment Plan

The Graduate Repayment Plan, with a similar lifetime as that of the Extended Repayment Plan, the payments are low during the first period and they increase over time, usually every two years. This plan fits in between Standard and Extended Repayment Plan with lower payments initially and will adjust higher every two years to allow borrowers sufficient time to build their income steadily.

Income Contingent Repayment Plan

The calculation under the Income Contingent Repayment Plan includes borrowers annual income and family size. Monthly payments are adjusted annually with a maximum lifetime of twenty five years. This plan provides the flexibility to make payments according to borrowers annual income and thus enable them to avoid any financial hardship.

Its up to the borrowers decision to choose the type of plans, I hope the above explanation will provide a better understanding on direct debt consolidation loan.

More Bank for Your Buck

What do you think of when you hear the word bank? The thought probably has nothing to do with anything enjoyable. If you were to ask any business professional the first word that comes to mind, it would most likely be a provider of debt or money. When I hear the word bank, I think of vendor. I wish I could see the jaws drop on the people reading this excerpt. A vendor? What is this guy talking about? Before you drop my idea all together let me explain what I mean when I say: Your bank could probably become your best vendor.

Every business owner deals with vendors on a daily basis. The better vendors in the industry will not only provide goods or services to your business, but will also provide you with technical assistance or expertise in their field. This is how you should view your "money vendor." Which bank provides you with the best service and technical support around? Here are some thoughts when choosing your next money vendor.

Size. There are huge banks, big banks, regional banks and local banks. Most of your local banks are focused on the local community and are limited to the amount of money they can lend to any one customer. Some have some very seasoned lenders who can be very helpful in providing technical advise. The larger banks have the traditional type of lenders, but can also have specialists for specific industries. If you need $25 million or more in financing, you will need a regional or larger bank. Most large banks are also training grounds for younger lenders, which means it may take some work to find a more seasoned technical assistant.

Rates. Although you might think that all banks are created equal, they are not. You might think that the big bank with huge deposits can give you the best rate, which is sometimes "true." You might think that the smaller bank with smaller deposits would charge a higher rate, which is sometimes "not true." Rates are based mostly on: 1) the historic financial performance of your company: free cash flow, debt to worth ratio, debt service ability, current ratio, collateral value and the advance rates on current assets (accounts receivable and inventory) and 2) how aggressive the bank is looking for loans. The biggest earning asset the bank has is its loans. So, if their loans are down, the bank can be more aggressive in funding new borrowers. This increases their outstanding loans so they can earn more money.

Loan Specialty. Many banks have developed a comfort or specialty for certain types of business loans. Some banks understand real estate very well and would rather not make an equipment or inventory loan. In those types of situations, if you need a piece of equipment or inventory financed and you have real estate that can be leveraged, you can probably get the loan you need. Some banks would rather do short term financing and use your accounts receivable as collateral. Others really specialize in consumer financing (cars, boats, home equity lines of credit, etc.), but they don't tell you that in their literature. It is much easier to obtain financing from a lender who understands your business, likes your collateral, and your proposed financing strategy, than one who disregards your needs to fit their portfolio requirements.

Relationship. Probably the most important factor in finding a good money vendor is finding a banking officer that is relationship orientated and technically competent. Most seasoned bankers have a wealth of experience and can give you valuable insight into your business, from a non-biased, financial point of view. Invite them out to your business, take them to lunch, and make them your friend. There are hundreds of banks and thousands of bankers. You can find one that has the expertise and interest in your business. It just might take a little work; but it is well worth it.

The Bottom Line. Focus on the relationship factor first and then work backwards. The work you put into picking your "money vendor" in the front end will pay you large dividends in the back end.

Home Equity 101

Lenders perceive home equity loans as relatively safe. This is because the bank can simply confiscate the house of those who fail to pay.

Studies have shown many avail of this to consolidate high interest debts, finance the purchase of a second home, pay for the tuition in college and renovate or remodel the house.

Despite the risk of losing the house for those who are unable to pay, many still avail of this because it is for anyone to qualify for and get a huge amount. The interest rates are very affordable and this can be written off as a tax deductible.

One program that is gaining popularity is the 125% equity home loan. This is considered to be a second mortgage that allows the individual to borrow one fourth of the value of the home. If the house is worth $100,000, this allows the person to borrow up to $25,000.

Many of these firms can be found online. The individual may only qualify after achieving a certain credit score and under certain guidelines, which is up to the lender.

The basis for those who qualify for this loan will be up to the lender. These firms can look at the length of time the homeowner has lived there as well the individual's current credit score. These things will influence the amount that will be given when the application has been approved.

The lender will not require the applicant to have the property appraised when requesting for a home equity loan. The purchase price will be used as the indicator if the person has lived there for less than a year.

An automated value model, recent tax assessment or simple drive by appraisal will be utilized if the applicant has lived there for a number of years.

A home equity loan may last from 10 to 30 years. It is best to shop around and compare the rates of various lenders before signing anything on paper.

Everyone in the household must understand what will happen in getting this type of loan. This means making some sacrifices to cut down on costs to be able to pay on time rather than losing the house.

How to Search for the Best Certificate Deposit Interest Rate?

Everyone wants to earn money as easily as possible. One of the easiest ways of acquiring new funds is to shop around for the best certificate deposit interest rate available. In order to ensure that you are getting the best deal possible you need to do the following:

First, check your current certificate deposit interest rate as well as the time length on that rate.

Second, Look inside of the bank your currently are doing business with. Your banking institution may offer varying interest rates based upon the amount of monies within a CD. It may be more beneficial for you to combine two or more certificates of deposit into one larger CD to receive the higher interest rate.

Third, see if the term of your CD can be extended. This is an excellent way to ensure that a great rate you have continues for a longer duration of time or to secure a higher certificate deposit interest rate because you are investing more over a longer period of time and bumping you up to the next interest tier level.

Of course, if you are getting the best interest rate that you can from your current institution, it is time to shop around and see what other banks and financial institutions can offer you. Like any other profession, the banking industry is a business and they need customers to survive. Compare what another bank can do for you using the rates of your current bank. Ask questions and see what this new bank can offer you that are positive to the restructuring of your assets. A little bit of investigating could easily ensure that your CD interest rate will be increased.

Before you make any moves with your money, you need to consider banking regulations and whether changes to your CD will incur penalties if you decide to roll them over when the CD comes up for renewal. If it is more advantageous to incur a small withdrawal fee in order to acquire a CD with greater interest payouts to you, you have to do what is in your best financial interests, even if it costs a little to make much more.

When looking for information related to interest rates, don't just focus on one source but do a little bit more research so that you are aware of various perspectives. In this information age we live on, there's a lot of valuable input you can find on any subject so take your time to find out what you need. Because of this, we have gathered some information for you to save you some time since research is always difficult. Yet without proper research there is no way to acquire the material you need to understand. Please see below for more information on Certificate Deposit Interest Rate.