What Students and Parents MUST Know about Student Loans – Tax Deduction
What Students and Parents MUST Know about Student Loans
John Williams
A student loan helps you get through college. Then you come out into a high-paying career. Its a great investment in your or your sons/daughters future.
Student loans generally give you a good deal. You get below-market interest rates, and you get a $2500 federal tax credit on interest paid over any period of time previously first 60 months only
It doesnt matter if the student, or parent takes out the loan; tax deduction remains the same.
* Did you know the federal government has a $50 billion student loan program
Not surprisingly, the federal government provides the largest percentage of student loans. Other student loans may come direct from colleges, private lenders or state governments.
One of the key advantages to a federal guaranteed loan is exactly that - its guaranteed. That means you dont need collateral. It also means the terms are kinder than a typical lender might offer. Of course, your educational program has to be approved by the government.
Types of student loans
* Federal Stafford Loan - for undergraduate or graduate students
A popular and cost-effective source of a student loan. Stafford loans provide low-interest, government guaranteed funds.
Stafford Loans come in two types, subsidized or unsubsidized. Whether or not youre eligible for subsidized depends on household income. The school ought to advise on this.
For subsidized, the government covers the interest right up to start of repayment i.e. they pay interest incurred during the course, in deferment and during the grace period before repayment begins. If you qualify for subsidized, its a great deal
For unsubsidized, the student must pay all interest incurred at all times, though they dont start repaying until after grace period.
* Federal PLUS Loan - for parents of undergraduates
Parent Loan for Undergraduate Students PLUS allows parents to take a loan on their Childs behalf. They can contribute to their Childs future, and get a great low- interest loan with continuing future tax relief.
PLUS actually allows parents to borrow the total cost of their childs education, minus any grants or other financial aid awarded. All tuition fees, meals, books, transport etc. can be included in the loan.
This really is a great deal, and has no income or asset requirements. Even poor credit history may be overcome. Repayment is flexible, and can include zero payments for up to 4 years.
Only one drawback to the Federal Stafford and Federal Plus loan - your school must be approved to participate in these programs. If your school isnt approved, then youve got some other options...
* Banks
Many banks offer unsubsidized Stafford loans. You still get the money, which you must have to attend college, but repayment options are more limited. Some deals offer you an interest rate reduction if you make payments on time.
* State Loans
Most states offer guaranteed student loans. Apply direct to Banks, wholl administer the State program. Its usually a more expensive way to borrow than Stafford.
* College Board Extra Credit Loan
Administered by your college. Can be expensive, and best used only in an emergency e.g. your aid is withdrawn.
* Other Loan Sources
A number of other sources may be worth trying if you get a problem with your first choice lenders. Academic Management Services affiliates with approx. 2000 schools. AMS pay your tuition fees if you repay them in less than a year. College Resource Center also has loans available.
If your parent served in the military, then a military loan should be investigated.
College can be the experience of a lifetime. A child starts college as a high school kid, and emerges a full grown adult with high-earning potential
Lawsuit Loans – Legal
Lawsuit Loans
Wensley McKenney
Lawsuit Loans which are also known as pre settlement cash advances allow a financially strapped plaintiff to access a portion of their future legal settlement to pay today
Welcome To The World Of "Upside Down" Motorcycle Loans! – Auto
Welcome To The World Of "Upside Down" Motorcycle Loans!
Jay Fran
With the depreciation on motorcycles being so enormous after they are driven off the showroom floor, the potential for a buyer owing more on their motorcycle loan than the bike is worth it quite high. Owing more on your bike than it is worth is often referred to as the world of “up side Down#8221;.
Many people finding themselves in this situation discover that financial lessons are sometimes the hardest and most expensive to learn. Motorcycle loans of more than 48 months especially without a down payment put you in the position of owing more than the value of the bike.
Let’s take a look at this phenomenon.
First, the interest calculation your lender uses can make a big difference in your situation, especially in the first 18 months. There are two primary interest calculations, pre-computed combined with rule of 78 and simple interest.
Pre-computed interest combined with Rule of 78, is typically the worst situation for a buyer because most of the interest is paid in the first 24 months. Therefore, in the first 24 months little of the monthly payment has gone towards paying down principal. If a buyer wishes to sell or trade in the motorcycle within this timeframe they will likely find themselves owing more than the bike is worth. Statistics show that the average owner trades in every 18-24 months.
Simple interest on the other hand, is much more favorable for buyers since interest accrues on the balance of the loan. However, buyers that extend their loans for greater than 48 months can still find themselves up side down with simple interest. This is especially true if a down payment is not made. The reason this occurs is that the motorcycle depreciates faster than the principal is paid; leaving the balance owed to the lender to be more than the bike can be sold for.
A common view that many people have is that they will just surrender their motorcycle to the lender if they are caught in an “up side Down#8221; position. If you are considering this option don’t! Your worries do not just end after your bike is surrendered or repossessed; in fact they are just beginning. The lender will sell your bike at an auction for much less than it is worth. You will still owe the difference between the amount you owed on your loan and the amount the motorcycle sold for at auction. So if you owe $5000 and the bike sells for $1500, you still are responsible for owing the lender $3500. To make it worse lenders may tack on hefty auction fees which you will owe as well. So the net result is that you are now responsible for making monthly payments on a bike you can no longer ride.
So what steps can you take to prevent from being caught “up side Down#8221;
1. Find a lender that uses simple interest. Avoid lenders that use pre-computed / Rule of 78 interest calculations.
2. Always try to put money down on your purchase.
3. Try to avoid motorcycle loans that extend past 36 months.
About The Author
Jay Fran is a successful author and publisher for a website that specializes in Motorcycle Loans: Poor Credit Approvals Available. A comprehensive resource on simple interest motorcycle financing, poor credit, new, used and bad credit motorcycle loans.
http://www.motorcycle-financing-guide.com/