The How and Why of Student Loan Refinancing

If you took out one or more student loans to pay for business school, and find that you are having a hard time making your student loan payments, you may want to consider student loan refinancing. 

Advantages of Student Loan Refinancing 

If payments are too much to handle, student loan refinancing may be to your advantage—especially if you have more than one student loan. Multiple student loans carry a variety of different interest rates. By using student loan refinancing, you can [link urlhttp://businessmajors.about.com/od/payingforschool/a/ConsolStuLoans.htm]consolidatethese loans and get one low interest rate. A better interest rate will lower your monthly payments and lower the total amount of money that you pay over the life of the loans. You may be able to save hundreds, or even thousands, of dollars after all is said and done. 

Before You Refinance 

Before applying for student loan refinancing, you may want to pull a copy of your credit report. If there is anything that can be improved upon, you should do your best to take care of it. A goodcredit score will not only help you qualify for low student loan refinancing rates, it will also make the approval process much less painless. 

Where to Get Student Loan Refinancing 

Student loan refinancing can be obtained from traditional banks and credit unions, but you may want to consider going with an online lender. The online lending market is very competitive and many online lenders are offering student loan refinancing rates that can't be beat. No matter where you decide to get your student loan refinancing, take time to shop around and compare lenders, rates, and loan terms. This is the only way to make sure your refinance pays off.

4 Vital Situations In Which A Home Mortgage Refinance Loan Can Help To Save Your Home

"Borrowers may apply for a home mortgage refinance loan for various different reasons. Typically, home refinancing allows you to take advantage of much lower mortgage rates and thus, reduce your monthly mortgage payments. This enables you to save lots of money over the entire refinance loan term. However, you could get much better results through mortgage refinancing if you are presently faced with certain unique situations."

There could be varied reasons for which borrowers might consider applying for a home mortgage refinance loan. By refinancing your existing home mortgages, you could obtain drastically reduced mortgage rates and thus, lower your monthly mortgage payments considerably. Nevertheless, mortgage refinancing could deliver the desired results if you are facing any of the below mentioned situations.

1. Monthly payments are high

The primary reason to opt for a bad credit mortgage refinance could be to take advantage of historically low interest rates that are being provided on refinance home loans. This enables you to reduce your monthly mortgage installments and save huge amount of dollars over the entire loan term. You could invest the money saved and earn interest on it to build up your savings side by side.

2. Faced with balloon payments

If you have opted for a 5 to 7 year fixed rate home mortgage loan with a balloon payment facility towards the end of the loan term, you could apply for mortgage refinance loans with a low rate of interest. Typically, a balloon payment is a large installment which is paid to close the mortgage loan. Remember, programs with balloon payments could be ideal to keep the initial installments low but if you want to avoid paying these, you could switch over from the existing loan to a new lower fixed or variable rate home mortgage with much ease.

3. Private Mortgage Insurance (PMI)

By availing a home refinance loan, you could get rid of private mortgage insurance (PMI). Normally, PMI is added to monthly payments by lenders to secure the monetary finances granted to borrowers who have poor or bad credit ratings and hence likely to default while repaying their mortgage debts. Refinance loans on the other hand do not require you to pay money for the PMI.

4. Build up equity in your home

With passing time, values of homes are bound to increase. And when equity gets built up in your home, you could always utilize it for some meaningful purposes. In such situations, you could obtain low rate cash out mortgage refinance loan and use it to renovate your home, pay off credit card debts or even student or education loan. Thus, through home refinancing you could be in a position to generate liquidity especially when the value of your home has increased.

With mortgage refinance rates at record lows, it could possibly be the right time to refinance your existing home mortgages. However, to secure a deal that works best for your specific financial needs and requirements, it is always better to take advantage of expert help that is available online at your disposal.

When to Refinance and What to Do with the Savings

In these volatile and tumultuous times, your household's income level may have drastically changed due to a lay off or extended unemployment. Or perhaps you're just coming off of a long period of unsteady employment and now your income has doubled. Either way, there's one area of your finances that deserves focus: your loans. From auto loans to mortgages and student loans, refinancing can help you weather difficult times or capitalize on upturns no matter which tax bracket or stage of adulthood you're in. Refinancing After College

Young borrowers have a distinct opportunity to enjoy some savings by refinancing or consolidating their auto loans, credit cards or student loans in those first few years after college. That's because when you first got those loans, you had little to no credit history--and now that you've had a few years of on-time payments and responsible borrowing, you've proven to the lenders that you deserve a lower interest rate. Refinancing your auto loans or private student loans now can help you take advantage of that threshold that you've broken.

Refinancing When Unemployed

Here's a common conundrum in America: many borrowers with adjustable rate mortgages (ARMs) are nearing their adjustment period and desperately want to refinance to a fixed rate mortgage before mortgage rates go up (which they likely will, considering the historic lows we're at now). But if you're like approximately nine percent of all U.S. citizens, you're unemployed and can't qualify for a mortgage refinance. The good news is that interest rates are expected to stay low for at least a few more quarters, which may be enough time for you to find a job--but that's no guarantee.

If your spouse is working, you may be able to move to a fixed rate mortgage--though perhaps at a less attractive interest rate and longer term than you would've received if you were both gainfully employed. Depending on your circumstances, locking in the certainty of a fixed rate mortgage may be worth it, since you'll be avoiding the very real risk of having your ARM adjust to an interest rate and monthly payment that forces you into default. And no matter what anyone tells you, a foreclosure is the absolute worst case scenario in terms of your credit history, your finances and, of course, losing your home.

For those who are unemployed with ARMs, it's time to take decisive and preventive action--consider your options carefully.

Refinancing with a New Job

New careers are promising prospects for your home and auto loans, but in most cases, you'll have to be employed for a certain period of time before lenders will allow you to refinance. Depending on the lender and your circumstances, you may have to wait three months to two years before you can qualify for an auto loan refinance or home mortgage refinance. But once you do start seeing the benefits of that additional income, you have a few options. You can reduce your interest rate and/or extend your loan term to lower your monthly payments and get more cash on hand. This extra cash can help you invest in education, build up your emergency fund or avoid defaulting on your other loans. Or you can reduce your loan term to drastically reduce the amount of interest you'll pay in the long run, which can be saved or invested for your next home purchase, your child's education, your retirement fund or other long-term investments.

Refinancing as a Senior Citizen

Senior citizens have a plethora of refinance options at their disposal that can help them supplement their retirement income. A cash out home equity refinance or reverse mortgage refinance can turn your home's value into monthly income or a lump sum. There are a number of FHA sponsored programs that are highly beneficial for seniors.  Seek out an FHA-approved lender to find out more information. As you can see, refinancing is a strategic move that can save you from financial disaster in the short term or save you significant money in the long run. Take time to consider how a car loan refinance, home remortgage or debt consolidation could benefit you.

MoneyAisle is an online resource where consumers find great rates on auto loans and refinancing. MoneyAisle runs live, reverse auctions (like a reverse eBay) for consumers shopping for financial products. Consumers get exclusive rates and instant one stop shopping in a fun, dynamic auction format, and banks and Credit Unions get inexpensive access to new customers, accounts, and loans.

Utah Agency's Biggest Sale in 20 Years Comes Amid Sales Slump: Muni Credit

Utah's Board of Regents, which oversees the state's eight public colleges and universities, is making its biggest sale of debt in at least 20 years today as scheduled municipal deals fall to a three-month low.

The $365 million offering of top-rated tax-exempts will refinance existing debt, and will be backed by student-loan repayments under the Federal Family Education Loan Program, according to preliminary offering documents. Utah may have difficulty attracting investors because the government program backing it ended July 1, said Howard Cure, director of municipal research for Evercore Wealth Management LLC in New York.

"You may not have a lot of demand as they could lack liquidity" in the future, Cure said. "It's an unusual type of program."

States and local governments are set to borrow about $5.4 billion in the next 30 days, the smallest slate since Sept. 3, according to data compiled by Bloomberg. About $1.8 billion is anticipated this week, the lowest since the last week of 2009, Bloomberg data show.

Yields on top-rated tax-exempts due in five years jumped about 31 basis points, or 0.31 percentage point, this month through Dec. 15, before dropping 8 basis points through yesterday, according to a Bloomberg Valuation index. Trading desks are unlikely to make large purchases so close to year-end, according to a Dec. 17 research note from John Dillon, chief municipal bond strategist for Morgan Stanley in Purchase, New York.

'Exaggerated Volatility'

"The exaggerated volatility exhibited by the current municipal market only magnifies this annual dynamic," he wrote.

Utah's tax-exempt revenue bond includes serial maturities from three to 16 years, with the bulk coming due in November 2016 and 2017. The issue also includes $24.5 million in securities subject to the federal alternative-minimum tax, levied on high-income individuals and corporations.

About 3.9 million taxpayers were subject to the tax in 2008, and 6.3 million reported receiving tax-exempt income, according to Internal Revenue Service data.

Among the schools overseen by the board is the University of Utah, the state's flagship, which enrolls about 26,000 undergraduates, a 6 percent increase from 2009, according to a Nov. 22 report by Moody's Investors Service.

The federal education loan program enabled students to subsidize interest costs, get graduate loans and consolidate repayment of eligible grants. The program includes a 97 percent federal guarantee on defaulted loans, Moody's said Dec. 16. Loans originated under the FFELP program have a balance of about $930 million, offering documents show.

Biggest Issue

The tax-exempt issue is the largest deal the board of regents has made since at least 1990, Bloomberg data show.

The board will enter into an interest-rate swap to hedge the risk of issuing fixed-rate bonds to finance variable-rate student loans, Moody's said. The swap, with the Royal Bank of Canada, will be indexed to the London interbank offered rate, the documents show. Such contracts typically require buyers to pay fixed rates in exchange for variable payments from the banks arranging them.

Greg Stauffer, associate commissioner of finance and facilities wasn't immediately available to comment, said Joyce Cottrell, a spokeswoman.

Treasuries Decline

Treasury prices pared advances yesterday as stocks appreciated and the Federal Reserve concluded purchases of $14.6 billion in debt, the biggest amount in a single day under the second round of quantitative easing. The benchmark 10-year note yield advanced less than one basis point to 3.34 percent at 5:08 p.m. in New York, according to BGCantor Market Data.

"There's a tremendous amount of movement in this market," Cure said. "It's a funny time of year to be approaching with a big issue."

Following are descriptions of pending sales of U.S. municipal debt:

PUERTO RICO ELECTRIC POWER AUTHORITY, the commonwealth's monopoly power utility, plans to sell $500 million in revenue- backed Build America Bonds this week to help finance portions of the Via Verde project, a natural gas pipeline that is scheduled to be completed by February 2012. The power authority is rated BBB+ by Standard & Poor's and Fitch Ratings, the third-lowest of 10 investment grades. UBS AG will lead banks underwriting the securities. (Added Dec. 21)

METROPOLITAN TRANSPORTATION AUTHORITY, which runs New York City's subways, buses and commuter trains, plans to sell $350 million in Build America Bonds today to finance capital projects. Underwriters led by Barclays Plc will market the issue. In June, the authority's debt was rated A+ by Fitch, fifth-highest, and A by S&P and A2 by Moody's Investors Service, both sixth-highest.

Student loans leave crushing debt burden

The cost of a college education is rising faster than the cost of medical care and as much as three times as fast as consumer prices in general. But that's just the beginning of the price of admission.

This is the story of a debt crisis few are talking about.

Americans now owe more on their student loans than they do on their credit cards — a debt fast approaching $1 trillion with no end in sight.

Students borrow because they see little choice. A college education, after all, is a key to success. That, it seems, is an article of faith.

For Rick and Tami Tuipers, of the Chicago suburb of Tinley Park, Ill., the world revolves around their kids.

"We've committed to our children's education from day one," said Tami. "That's the commitment we made when they were born."

Zach is a high school sophomore and, at 15, the youngest in the family. Shelby, 18, is a senior and interested in science.

Refinancing Student Loans

Digital News Report- Not all student loans are alike. There are government sponsored student loans and private student loans. You might want to refinance your student loans in order to lower your monthly payments or your interest rates. This is often called a student loan consolidation, which means that you are refinancing one or more of your student loans into one new loan. Student loan consolidation lenders will offer you a lower interest rate if you have an excellent or good credit rating verses a bad or poor credit score.

If you have a federal student loan, you might want to see what other options may be available to lower your monthly payment. Theses loans can lower your payment if your income is restricted.

Either way the student loans need to be paid back, and figuring out the best way to pay back the student loans will be helpful. Figuring out a budget that will address the student loan debt would be an important step to repay it back in a timely fashion.

If you are still stuck with figuring out how to make the student loan monthly payments, talk to your lenders, student loan consolidation companies, and also student loan government agencies to figure out how you can pay back the debt you owe. Credit counselors are another option to help you get on the path to paying back your debts. These professionals can help you set up a budget and a repayment plan for all of your debts. They can also educate you on all of your options when dealing with your debt.

Time for real student loan reform

In March, Congress enacted desperately needed reforms through the student loan provisions tucked in the healthcare reconciliation package.

Gone are subsidies to lenders; instead, all federal loans will be issued directly by the Department of Education, saving taxpayers about $6 billion a year. Thanks to improvements in the income-based repayment program, recent graduates' payments won't be an undue burden as they get started with their professional lives. Finally, underprivileged students currently on Pell Grants won't get hit with previously scheduled reductions in disbursements in an era of rocketing tuition.

Even though the minority wailed about the changes, this is a great deal for Americans living outside the Beltway.

But there is one aspect of student lending in an even more dire need of attention: private student lenders (PSLs). A decade ago, the low prevalence of these loans meant action was not necessary, but today it is necessary for true student loan reform.

Due to negligence by both Democratic and Republican administrations, PSLs such as Sallie Mae became very powerful. They intensely lobbied public and private college financial aid offices to direct enrollees towards private lenders rather than encouraging federal options first. In exchange, the colleges received commissions and other various perks for those referrals.

It is no wonder, then, that PSLs' student loan portfolios doubled in yearly volume from $7.2 billion in 2003 to $15 billion in 2008, and the number is expected to grow.

Furthermore, the statistics on borrowers is startling at best and alarming at worst. According to the Project on Student Debt, 64 percent of private borrowers did not fully pursue federal options, and 26 percent did not take out any form of federal aid. Given today's tuition environment, the problem will only get worse.

The interest rates of PSLs are also the most predatory, an educational analogue of the subprime mortgages that ravaged the retirement accounts of millions of Americans. Based on short-term lending rates and a margin, the variable rates sound like an affordable alternative to government-based loans. But any misfortune during payment, such as if the mail doesn't arrive on time, can change that attractive rate to hellish default rates near 18 percent, a cost of borrowing that many cannot pay.

So they can get rid of them through bankruptcy, right? Actually, no.

The most sinister aspect of PSLs is their bankruptcy protections. When bankruptcy laws were restructured in 2005, the loans became nearly impossible to discharge in bankruptcy, a privilege previously given only to federal and state obligations. In comparison, a reckless, card-swiping spendthrift can discharge or reduce their debts in bankruptcy court.

Yet even the most desperate PSL clients cannot get rid of their debt, banishing them to financial oblivion. Thomas Jefferson's warning about all-powerful banks has come true, with politicians creating a financial weapon of mass destruction. Defenders of private student lenders say that this is capitalism, but capitalism requires a free flow of information and clear understanding of lending terms, both of which are absent with these loans.

This is not capitalism; this is full-blown anarchy.

There are two immediate options available to legislators, and I suggest both be undertaken. First, Congress must end the bankruptcy privileges. While discharge of government-issued promissory notes should be prohibited in order to protect the taxpayer from losses, let's make one thing clear: Sallie Mae is not sovereign, is not the equivalent of the United States government, and should not be treated as such. Fortunately, courageous members of Congress such as Steve Cohen, D-Tenn., have introduced legislation to address this issue, but current obstruction by both sides is certain to kill it.

Second, Congress can enact legislation to offer refinancing options to borrowers who have been charged usurious rates. In fairness to those who took out federal student loans, the rates would probably be around 8 percent, but is much better than the alternative.

In addition to the interest rate advantage, a refinancing bill would allow applicants to use recent reforms such as income-based repayment that limits monthly payments to 10 percent of disposable income. This is much better than the $900 a month charges that some graduates have to pay.

Would this reduce the loan portfolios of private student lenders? Yes, but the refinancing options would give hope and relief to graduates who fell prey to these snake oil salesmen, giving them the ability to enjoy a better future and prevent them from being indentured servants for a substantial part of their lives.

These reforms will provide a square deal for college students striving to fulfill their dreams and save graduates from crushing educational debt they don't understand.

It's time to demand that Congress join people like Rep. Cohen and pursue effective reforms for private student loans, bringing order to the Wild West of lending. It's high time to send these legalized loan sharks packing, but our timing will determine if we the students do so from a position of solvency, or a position of impecuniosity. I'll take the former.

Gregory Poole is a graduate student in metallurgical engineering.