College grads and their loans

While not real estate oriented, many of our readers have college-age students or have just graduated college. The AP is reporting on college grads and their loans.

“Graduating into a barren job market is stressful enough. When massive student loans await, the rite of passage can be downright terrifying.”

The AP provides some tips for college new grads confronting their loans.

Step 1: Know what you owe. “Although the interest rate on federal loans tends to be favorable, it kicks into gear as soon as the loan is taken out. That means you've got four years of interest on top of your loans by the time you graduate.”

Step 2: Pick a plan, but not just any plan. Picking a short term repayment plan is smartest. “If you can't keep up with the payment schedule you picked, you can always switch plans. You're allowed at least one change a year with federal loans.”

Step 3: Consider postponing payment. Payment can be deferred on federal loans under “select circumstances.” On private loans, deferment terms are set by the lender.

Step 4: See if you should consolidate. “A consolidation loan lets you combine loans to make a single monthly payment. You also get a fixed interest rate for the life of the new loan.” The drawback—“consolidation usually extends repayment, meaning the overall cost of the loan will be higher.”

Step 5: Avoid default. Defaults do turn up on your credit report and they could impact other credit applications. “The good news is that defaults on student loans can be rehabilitated and erased from your credit report. With federal loans, that requires nine full payments during a span of 10 months. Private lenders might not offer rehabilitation programs.”

For the full article, read The Asbury Park Press, Know Your Loan Options. We hope you find it helpful.

Vested Title Inc.
648 Newark Avenue, P.O. Box 6453, Jersey City, NJ 07306
Tel 201-656-9220 - Fax 201-656-4506
E-mail vti@vested.com - www.vested.com

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