SavvySugar

Guess How Much: Average College Grad's Student Loan Debt

SavvySugar — Wed, 09 Sep 2009 04:30:57 -0700

Recent grads have been having a rough go of the recession-ridden real world. They're competing in a reduced job market and facing increased expenses as student loan repayment rears its head, plus interest. Can you guess how much the average college graduate has to pay back in student loans?

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Your Student Debt Load Could Soon Be Lighter

SavvySugar — Wed, 24 Jun 2009 06:30:22 -0700

Student loan repayment can be burdensome on tight budgets constricted by modest incomes. The government has developed a program that it hopes will put graduates more at ease about the issue. The Income Based Repayment plan will take effect July 1, and the federal program aims to cap monthly payments at an affordable amount based on income, family size and state of residence.

New loans just starting repayment and existing loans that have been in repayment are both eligible for the Income Based Repayment option.
Eligible loans include those used for education including undergraduate, graduate, professional, and job training.

Learn exactly which loans are eligible, just read more.

The program applies to Stafford, Grad PLUS, or consolidation loans made under the Direct Loan or Federal Family Education Loan programs.
The Income Based Repayment option is not available to loans currently in default, parent PLUS loans, or consolidation loans that repaid a parent PLUS loan or private student loans.
Loan forgiveness may be granted for remaining debt after 25 years of payments, and graduates who enter public service jobs may be granted loan forgiveness after 10 years.

Ultimately, your lender will determine eligibility for the Income Based Repayment option, so contact your lender to apply. Understand that while the option makes repayment less stressful, particularly at the beginning of your career, lower monthly payments could extend your repayment period and cost you additional interest. Visit IBR Info for more information.

Guess How Much: Student Loan Debt For New Grads

SavvySugar — Mon, 22 Jun 2009 13:30:35 -0700

Higher education comes with a higher cost, year after year. Student loan debt is particularly problematic for new graduates because it's more difficult for them to find employment after graduation. While some can turn to their parents for help in making loan payments, it's not feasible for many families who have been affected by the recession. Can you guess how much debt the average grad has coming out of college?

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Credit Scores by the Numbers: The Good and the Bad

SavvySugar — Mon, 16 Mar 2009 13:30:32 -0700

It's simple: the higher your credit score, the lower the interest rates accessible to you. Now that lenders have started being more attentive to the credit histories of potential borrowers, there's one more reason for you to pay more attention, too. Once you know your credit score, you should do everything you can to raise your number so that you save as much money as possible on interest rates. Here are a few more facts about credit scores according to FICO.

The median credit score in the US is 723.
The highest possible score is 850, while the lowest possible score is 300.
Most lenders require a score of at least 760 to get the best rates.
After 760, interest rates increase according to these score brackets: 700-759, 680-699, 660-679, 640-659, 620-639.
Interest rates increase significantly with a score below 620, because at that point lenders consider you to be in the subprime category.

Source

20 Percent of Homeowners Owe More Than Their Homes' Value

SavvySugar — Thu, 05 Mar 2009 04:30:58 -0800

Chances are, if you know several homeowners, at least one of them owes more on her home than it's actually worth. This situation is commonly described as being underwater, because the home cannot be sold to pay off the mortgage. New results from a study composed by First American CoreLogic show that one in five homeowners were in this awful situation as of the end of 2008. Here's more:

The value of residential properties was $19.1 trillion at the end of 2008, versus $21.5 trillion at the close of 2007.
While the study included 43 states and Washington, D.C, it found that half the decline in overall home values occurred in California.
Arizona, California, Florida, Georgia, Michigan, Nevada and Ohio remained the most stressed states - those seven states alone are home to 62 percent of underwater borrowers.
Increasing signs of stress and deterioration appeared in places that had been relatively healthy, like Connecticut and Washington, D.C.

Source

Credit Scores Are Important, but They're Not Everything

SavvySugar — Mon, 12 Jan 2009 13:30:20 -0800

When it comes to our financial resumes, consensus is that credit scores are the number one factor that lenders rely on to determine the credit-worthiness of a borrower. After a year of one home foreclosure after another, some mortgage lenders have begun investigating financial habits that tell a bigger story than what the credit score can offer. Find out what has changed in the lending world when you read more.

While credit scores are far from obsolete, some lenders believe the scores alone don't do a good job of distinguishing credit-worthiness of those with average scores. Time points out that a few years ago, Fair Issac predicted a borrower with a 680 FICO score had 0.7 percent chance of ever defaulting on the loan, and someone with a 700 score had a 0.3 percent chance. However, 1.5 percent of year-old mortgages belonging to borrowers with credit scores between 660 and 720 have had their homes foreclosed or are in the process of foreclosure.

Phone payment records and other alternative credit information, like rent payment histories, are now being used more frequently to determine a borrower's ability to repay a loan. What do you think of this practice? Do you think whether or not someone consistently pays their phone bill on time should be weighed along with your credit score?

Source

Most Shocking Headline: Graduates Flee US to Escape Student Loans

SavvySugar — Wed, 17 Dec 2008 13:30:41 -0800

Graduating with debt isn't the best way to start out in the real world, but it's a reality that many college graduates face. Most grads set up a plan to pay off their student loans within a certain time period, but some of the educated and in-debt have become too overwhelmed by their loans to repay them.

Instead of facing debt collectors, some students with massive debt are choosing to flee the country after they've defaulted on their loans. Grads who escape the US are running away from a problem that won't go away unless they figure out a way to fix it. There are certain cases in which some student loans are discharged or partially discharged because of hardship, and payment plan solutions for those who don't qualify for debt forgiveness - both of these are much better options than seeking a new address in another country.

Source

Graduates Flee US to Escape Student Loans

SavvySugar — Sat, 25 Oct 2008 11:00:57 -0700

Student loans are increasingly necessary for many students to pay for college, but these massive debts are causing some graduates to flee the country. It may seem dramatic, but leaving the country sometimes seems like the only option for grads that have defaulted on their student loans and can't find another way to escape the debt collectors.

CNN Money profiled a student loan fugitive named Chris who got a foreign address to escape his $160,000 student debt from getting a master's degree in music. He anticipated his monthly payments to be around $600, but they turned out to be a completely unmanageable $2,400. Chris says, "I am upset at myself. I could have gone to a cheaper school. But I'm most angry at the fact that for anyone who has debt that's not student loan debt, there's relief."

In some cases, student loans are discharged or partially discharged because of hardship. Chris and other graduates who feel helpless should explore these options before fleeing the country.

Source

Would You Ask Your Family For Down Payment Help?

SavvySugar — Tue, 21 Oct 2008 06:30:58 -0700

Many young couples are betting that it's an ideal time to buy their first homes because there's better value on the real estate market, but barriers from banks' stricter requirements have caused them to turn to another lending source. These want-to-be homeowners, many who never asked for financial assistance in their adult lives, are turning to family members for help with down payments and related buying expenses like closing costs and co-op fees. Arguing that the properties will likely appreciate, some of these relatives are obliging with hope of participating in the eventual gain.

Source

Cash Is King When It Comes to Cars

SavvySugar — Thu, 09 Oct 2008 04:00:31 -0700

TeamSugar member RosaDilia just financed a new ride and put 20 percent down to secure her loan, and her comment about it not being easy (despite having a good credit score) coincided with a New York Times piece about the issue.

Since July, the average down payment has gone up by about $1,000 for non-luxury vehicles, from $4,946 in the first seven months of the year to $5,915 by the end of September. With credit scarce, many car buyers are foregoing a down payment altogether and simply paying cash for their vehicles.

Typically more than 90 percent of buyers use financing, but at the end of September, 31 percent of all non-luxury car sales were cash deals. The all but dried up credit market is debilitating to already struggling dealerships who are having trouble even getting financing for buyers with the best credit.

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