The rate for the different federal student loan programs are recalculated every July 1 based on a Department of Education formula, which is tied to the 91-day U.S. Treasury bill. For the first time in several years, the rate on the student loan did not go up by too much. The rate of the variable Stafford student loan went up from 6.80 to 7.22 per cent.
The rate of the PLUS loan also went up by the same amount. The PLUS loan is a federal student loan program for graduate students. It is also a program that allows parents to borrow money to put their children through school. The rate on the PLUS student loan went up to 8.02 per cent.
While the percentage increase of the US Department of Education student loan may not seem like a lot, given the amount of money that students borrow for college, every penny saved is well worth it.
Even though the percentage increase in the student loan rate did not go up by much, students graduating in 2007 who consolidate within their grace period of six months can save a lot of money. The reason for this is that by consolidating during the grace period, students can receive a 0.60 percent interest rate reduction on the U.S. Department of Education student loan. This translates into a saving of $700.
Saving $ 700 is not the only advantage of consolidating student loan. Student loan consolidation also allows borrowers with high balances to lower the amount they pay each month by fixing a rate of interest for the entire loan amount. In addition, borrowers can choose from a number of repayment options including standard repayment.
The current "grace period" consolidation rate for the student loan is 6.625 per cent; however, the rate will increase to 7.25 percent for borrowers who miss the grace period discount.
Once borrowers recognize the merits of student loan consolidation they need to shop around for the best deals to consolidate student loan. Some of the common incentives that are offered to borrowers include a reduction of 0.25 per cent in the interest rate for borrowers who choose direct debit on the standard repayment.
Borrowers who make on-time payments for 36 months are also eligible for a student loan rate reduction of 1 per cent on the remainder of the life of the loan. Students need to negotiate with the lending agency about the terms and conditions of the loan repayment.
Some cards offer low interest rates, but have annual charges. Others have no annual charges, no fees for cash advances, yearly account summaries, purchase security, insurance protection plans, a 25-day grace period, credit up to $35 000 and fixed rates as low as 9.9%. This is one of the better deals to be found, and you can apply for these cards on a secure site. Other cards offer APR up to 14.9% and some have only a 20-day grace period.
When you are applying for major credit cards online, it is important to consider whether it offers a fixed rate APR. Unlike variable rate cards, interest on fixed rate cards rarely changes. If interest rates do change the card provider must let you know in advance. Variable rates cards can change rates at any time, and providers need not inform you of changes beforehand. You may also want to check out tier rate cards, though few companies offer this option.
It is important to understand and monitor your grace period, since this helps determine how much you will pay each month. You may make a purchase of $150 but if you carry a balance beyond your grace period, you will end up paying a lot more.
Many card providers calculate your APR every day. In this case, if your card has a 9.9% APR and your purchase is $150, you could pay $170 or more the following month by missing your grace period.
Go online and search for the best deals when applying for a credit card. Apply only with reputable companies, as many credit providers will scam their clients.
Not long ago several credit card companies were sued for illegally adding charges that they should not have. You must protect your self as a by investigating thoroughly before you sign agreements. Once you have your card, monitor your statements carefully. Even reputable companies will concoct evil plans to maximize their profits.
If you have a bad credit history be sure you watch the activities of your creditors. Your company is obligated to update your status with the credit bureaus twice a year. If you have made the necessary payments for six straight months your credit status should improve. Some companies, however, can be negligent in making their reports. Ensure that your good behavior is reported and rewarded. This is important when rebuilding your credit.
Only use your card when you need it, especially if you have bad credit. If possible, pay all of your bills on time. Use your credit card to avoid utility shut-offs, but if you have low-income status you may qualify for state support. Explore your options before using your credit card.
Both Grojan Fabiola & Landon Mcgehee are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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