Welcome to Student Equity Loans
There are many students and graduates out there that are struggling with paying for their student loans. Often times, these people have heard of refinancing student loans in order to make their payments lower and more manageable. But before you consider refinancing student loans, there are some things you should first consider. Let this be your guide to the truth about refinancing student loans.
Refinancing student loans often seems like a good idea. In fact, refinancing student loans is a good idea, if you use it to your advantage. We shall go over that in a minute. First, you need to know that most student loans are often of a variable percentage rate until the rate is locked through means of a loan consolidation, or by refinancing the loan. Currently, interest rates are quite low so it is a good time for refinancing student loans.
Does Student Loan Have Benefits?
Yes, there are two main benefits. The first one is that you will improve your credit rating. By obtaining a student loan program, you are telling the financial system that you are a responsible person, worried about your debts. And this is the kind of people that financial institutions care for.
The other benefit is that it is tax-deductible. That means that you won't have to pay as much taxes to the Internal Revenue Service. Too good to be true, isn't it? Well, there is a setback, and that is you need to do some research in order to avoid any future problems with this federal agency.
Repayment Plans
Extended Repayment Plan
This is a flexible plan for all types regardless financial background as it allows you to pay the least possible amount per month and repayment may be extended to 10 to 25 years. Timing for repayment depends on the total amount you owe and your affordability. On the other hand you may have to pay more interest, as you will take longer time to repay.
Standard Repayment
Under this plan you will pay a fixed monthly amount for a loan term of up to 10 years. Depending on the amount of the loan, the loan term may be shorter than 10 years. There is a $50 minimum monthly payment.
Graduated Repayment
Unlike the standard and extended repayment plans, this plan starts off with lower payments, which gradually increase every two years. The loan term is 12 to 30 years, depending on the total amount borrowed. The monthly payment can be no less than 50% and no more than 150% of the monthly payment under the standard repayment plan. The monthly payment must be at least the interest that accrues, and must also be at least $25.
Consolidation loans have longer terms than other loans. Debtors can choose terms of 10-30 years. Although the monthly repayments are lower, the total amount paid over the term of the loan is higher than would be paid with other loans. The fixed interest rate is calculated as the weighted average of the interest rates of the loans being consolidated, assigning relative weights according to the amounts borrowed, rounded up to the nearest 0.125%, and capped at 8.25%. Some features of the original consolidated loans, such as post graduation grace periods and special forgiveness circumstances, are not carried over into the consolidation loan, and consolidation loans are not universally suitable for all debtors.