Financing an education can be extremely expensive these days and it is more common to have a student leave school in debt than not in debt. In most cases this debt runs into the tens of thousands of dollars, and when it is private student loans the interest will accrue while you are in school and get added on to the loan after you graduate. The good news is that you have six months after graduation to get a job and decide to start consolidating private student loans, or paying them back one at a time. There is a lot to consider when you are thinking about consolidating student loans, and you will find a few different ways to consolidate your loans that you may want to take advantage of.
Unlike federal student loans that have interest rate caps on consolidation loans, consolidating private loans will put you at the mercy of the current loan rates. In some cases this can be a bad thing, and in other cases this can be the best financial thing to happen to you in your young life. Many financial institutions offer programs to help students consolidate education loans that carry high interest rates but extended payback terms. You can get a consolidation loan that would stretch as long as 20 years, and that can help lower your payments.
If you did not take out a large amount of private student loans, then consolidating private student loans may be a bit easier for you. One of your options is to pursue a secured private loan to consolidate your student loans. A secured private loan requires collateral supplied by the borrower that needs to be owned in full by the borrower, and it can be unusual for a new college graduate to have that much personal property. However, if you are able to get a secured personal loan then you can pay off your private loans at a significant discount. If you were responsible with your finances in college then you may even qualify for an unsecured personal loan which is a loan that requires no collateral. Explore your borrowing options before resigning yourself to one solution.
Consolidating your student loans can lower your monthly payments and make paying your loans back significantly easier. If you are able to find a consolidation loan that is at a lower interest rate than your individual loan then you will be consolidating private student loans and saving money on interest payments for the overall cost of the loans at the same time.
Before you begin consolidation make sure you take a long look at the loans you are trying to consolidate. If you cannot get a better deal on a consolidation loan than you have with your individual loans then consolidation may not be your best move. If you got your private student loans at a time when interest rates were low and you graduated when interest rates were on the rise, then consolidating your loans may cost you more money than it would cost you to just keep them as they are.
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Monday, September 28, 2009
Monday, September 7, 2009
Wiltonian helps launch student loan company
WILTON -- The future of lending is here and it isn't going anywhere, said Al Alper, president and chief operating officer of People Capital, a brand new peer lending company that issues private student loans.
People Capital, a fully web based student loan company, is opening up its service to college students around the country this 2009 academic school year.
"People Capital is unlike any other student loan company," said Alper a Wilton resident who is the chairman of the town's Republican Town Committee. "Unlike other loan companies, the market sets the prices and rates for the loans."
The idea for People Capital was initiated in 2006 by its founder and CEO, New York City resident Tom Shelton. Alper said Shelton was very interested in the student loan business and thought that a new method of lending needed to be created. In comparing People Capital to other loan companies, he said that one major difference is the New York City-based company does not have one specific rate or pricing. Instead, it lets the lenders decide what that price will be.
"This company is designed for anybody to loan to anybody," said Alper. "A consumer posts a need for a loan on the site and a lender looks at their background and decides if they want to lend the money to that person and at what rate -- it's like an auction."
To make it easier for lenders to decide who they want to lend to, People Capital created "Human Capital Score," a peer-to-peer lending platform. Alan Samuels, chief product officer of People Capital, says Human Capital Score gives academic performance data to figure out a borrower's future potential.
"The concept of the Human Capital Score is to figure out a college student's achievements and what they will end up making when they get out," said Samuels. "The estimations we give will help lenders have a better insight of the students they are lending money to."
The Human Capital Score looks at college student's SAT scores, GPA, majors and extra-curricular activities. After a student fills out this information, the Human Capital Score produces a projection of what their income and future potential will be.
"You can't always project exactly what a person will make or the career they will have, but this is more on the money than any other option available to lenders," said Alper.
Samuels said the Human Capital Score was launched in January for investors to try out, and has received a lot of positive feedback. He said that even though this is People Capital's first year, he has no doubt it will be a success.
"This is not only a great way for lenders and borrowers to get the best deals on loans, but it also will make the world a better place," said Samuels. "I found a lot of attraction with lenders having a connection with helping kids pay for college and (getting) an education, especially in this economy it's a great new system."
People Capital, a fully web based student loan company, is opening up its service to college students around the country this 2009 academic school year.
"People Capital is unlike any other student loan company," said Alper a Wilton resident who is the chairman of the town's Republican Town Committee. "Unlike other loan companies, the market sets the prices and rates for the loans."
The idea for People Capital was initiated in 2006 by its founder and CEO, New York City resident Tom Shelton. Alper said Shelton was very interested in the student loan business and thought that a new method of lending needed to be created. In comparing People Capital to other loan companies, he said that one major difference is the New York City-based company does not have one specific rate or pricing. Instead, it lets the lenders decide what that price will be.
"This company is designed for anybody to loan to anybody," said Alper. "A consumer posts a need for a loan on the site and a lender looks at their background and decides if they want to lend the money to that person and at what rate -- it's like an auction."
To make it easier for lenders to decide who they want to lend to, People Capital created "Human Capital Score," a peer-to-peer lending platform. Alan Samuels, chief product officer of People Capital, says Human Capital Score gives academic performance data to figure out a borrower's future potential.
"The concept of the Human Capital Score is to figure out a college student's achievements and what they will end up making when they get out," said Samuels. "The estimations we give will help lenders have a better insight of the students they are lending money to."
The Human Capital Score looks at college student's SAT scores, GPA, majors and extra-curricular activities. After a student fills out this information, the Human Capital Score produces a projection of what their income and future potential will be.
"You can't always project exactly what a person will make or the career they will have, but this is more on the money than any other option available to lenders," said Alper.
Samuels said the Human Capital Score was launched in January for investors to try out, and has received a lot of positive feedback. He said that even though this is People Capital's first year, he has no doubt it will be a success.
"This is not only a great way for lenders and borrowers to get the best deals on loans, but it also will make the world a better place," said Samuels. "I found a lot of attraction with lenders having a connection with helping kids pay for college and (getting) an education, especially in this economy it's a great new system."
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