Tuesday, September 8, 2009
Study about loan(Credit)
You’ve graduated from college and entered the “real world.” Now all you have to do is figure out your student loans. On average, college students graduate with a whopping $20,400 in debt. Consolidating your student loans can be helpful if you have a large balance spread out across multiple lenders. Before you apply, make sure you know the pros and cons of consolidation:
Pro – Consolidating helps you lock in a low interest rate. Student loan rates are currently at all-time lows, making this the perfect time to consolidate your federal loans. If you consolidate, your new interest rate will be calculated by averaging the rates on your current loans. If you don’t consolidate your loans, your rates could increase in the coming years. Con – Consolidating can increase the overall cost of your loan. When you consolidate your student loans, the debts are combined into a new loan with a longer repayment term. This new 10-30 year term allows you to reduce the amount you have to pay each month but increases the long-term interest costs of your debts. If you can afford to pay off your current student loans quickly, it may be a good idea not to consolidate. Pro – Consolidation makes it easier to manage your debts. Borrowers with multiple federal student loans can have a hard time keeping track of when to pay and how much is due each month. When you consolidate your loans, you’ll only have one payment to make each month. Plus, you’ll only have one lender to deal with.
Con – Consolidation requirements can be tough. Student loan consolidators have a set of strict requirements for potential borrowers. Your current loans must be from select lenders, your total loan amount must exceed $10,000, you must have graduated or left school already, and you must not currently be in default on your loans. Pro – Consolidation comes with some other perks. Consolidating your student loans can help increase your credit score by reducing the number of open accounts on your credit report. You can also get a better deal on a consolidation loan if you meet certain special requirements, such as if you graduate within 6 months of the consolidation period and/or if you pay your loan on time consistently. Con – Consolidation may not be your best option. There are other to help you repay your loans or have them forgiven. Government programs exist that help borrowers repay their student loans by doing community service or becoming a teacher in certain areas. If you have a Perkins loan, there are opportunities that allow you to have the debt forgiven. It is a good idea to research all your options before you consolidate.
Pro – Consolidating helps you lock in a low interest rate. Student loan rates are currently at all-time lows, making this the perfect time to consolidate your federal loans. If you consolidate, your new interest rate will be calculated by averaging the rates on your current loans. If you don’t consolidate your loans, your rates could increase in the coming years. Con – Consolidating can increase the overall cost of your loan. When you consolidate your student loans, the debts are combined into a new loan with a longer repayment term. This new 10-30 year term allows you to reduce the amount you have to pay each month but increases the long-term interest costs of your debts. If you can afford to pay off your current student loans quickly, it may be a good idea not to consolidate. Pro – Consolidation makes it easier to manage your debts. Borrowers with multiple federal student loans can have a hard time keeping track of when to pay and how much is due each month. When you consolidate your loans, you’ll only have one payment to make each month. Plus, you’ll only have one lender to deal with.
Con – Consolidation requirements can be tough. Student loan consolidators have a set of strict requirements for potential borrowers. Your current loans must be from select lenders, your total loan amount must exceed $10,000, you must have graduated or left school already, and you must not currently be in default on your loans. Pro – Consolidation comes with some other perks. Consolidating your student loans can help increase your credit score by reducing the number of open accounts on your credit report. You can also get a better deal on a consolidation loan if you meet certain special requirements, such as if you graduate within 6 months of the consolidation period and/or if you pay your loan on time consistently. Con – Consolidation may not be your best option. There are other to help you repay your loans or have them forgiven. Government programs exist that help borrowers repay their student loans by doing community service or becoming a teacher in certain areas. If you have a Perkins loan, there are opportunities that allow you to have the debt forgiven. It is a good idea to research all your options before you consolidate.what is credit scoring?
Credit scoring is an important part of computerized loan origination and it is becoming commonplace. Here's how this type of origination works: A loan agent, or mortgage broker, enters the prospective borrower's loan application into a computer. The borrower's data is then electronically transmitted to a loan processing center for underwriting and approval. Some lenders use artificial intelligence software programs to electronically underwrite loans.
One element of streamlined underwriting, which enables lenders to objectively evaluate risk and make informed loan approval decisions quickly, is credit scoring. Credit scoring has been used for years for speedy car loan and credit card approval.
Several companies provide credit scoring models. One of the most widely used was developed by the Fair, Issac company. The Fair, Issac score analyzes the interrelationship among approximately 100 variables, utilizing information gleaned from your credit file data at the three national credit bureaus (TRW, Trans Union and Equifax).
One element of streamlined underwriting, which enables lenders to objectively evaluate risk and make informed loan approval decisions quickly, is credit scoring. Credit scoring has been used for years for speedy car loan and credit card approval.
Several companies provide credit scoring models. One of the most widely used was developed by the Fair, Issac company. The Fair, Issac score analyzes the interrelationship among approximately 100 variables, utilizing information gleaned from your credit file data at the three national credit bureaus (TRW, Trans Union and Equifax).
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