Student Loan Lenders

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Smart Student Loans

There are companies to help student borrowers find student loans that meet their budget and bring them peace of mind in order for students to concentrate on their education; not how they will pay off their student loans.

Now we can see the cost of college is surging and financial aid is reducing, private loans make the potential of attending college possible for many students that could not otherwise afford college. But consumer activist and student groups are concerned that the growth of these loans can eventually demonstrate catastrophic for borrowers who don’t understand the risks.

With the changes coming in the future for student loan borrowers, it is important that borrowers educate themselves in the area of student loans. Do research on the

Lending Company and see if you will feel comfortable borrowing from the company and most important you have to feel comfortable with the monthly payments NOW.

Before signing any papers ask what the WHOLE PAYMENT is and then ask how long you have to pay off the loan.

NOTE:

DO NOT singe anything unless you completely understand what you are signing on.

?Feel free to take your time reading all the forms that are giving to you.

?Ask many questions.

?Have a trustful advisor with you.

?Do not feel pressured to sign anything

?Do lots of research

?Give your self lots of time to find a student loan that you are comfortable with.

What is the Loan Process?

This article will help in the understanding of how the student loan process works.

Who are involved, the implications of signing a promissory note; which is your contract to borrow or repay and how you will receive your money.

“Who are the lenders? What are the services provided? What role does the federal government play in the student loan process?

Lenders Who Finance Education

Most schools often provide a list of companies and institutions that lends money to finance a students education.

This resource will assist you in finding lenders to work with according to your individual needs.

Who might lenders of college student loans be?

? A school

? An insurance company

? A pension fund

? A credit union

? A bank

? A savings and loan association

? A consumer finance company

? The federal government

Lenders own loans and receive borrowed payments. Lenders frequently sell their loans to other parties.

If this happens you will be notified who the new owners are without any rate changes Lenders own loans and receive borrowed payments. Lenders frequently sell their loans to other parties. If this happens you will be notified who the new owners are without any rate changes.

Secondary Market

Secondary markets are organizations that purchase loans from other lenders. By purchasing loans, they restock the lenders funds that enable the lender to provide additional loans to students and parents.

Servicer

A servicer is a company that lenders and secondary markets use to manage loans.

They carry out duties on behalf of the secondary markets or lender. These duties may include answering customer service phone calls, collecting delinquent accounts, processing loan application, and processing loan payments.

Borrower

This is the person who receives the student loan, and is responsible for repaying the loan.

The school plays an important role in the student loan process. They make recommendations on a lender choice. They determine a financial aid award that affects the amount students will ultimately need to borrow. The school also provides answers to student loan process.

Guarantor-backer or sponsor

A guarantor is a state or private nonprofit agency approved by the ED to guarantee FFELP (Federal Family Education Loan Program) student loans. In the FFELP the guarantor is the chief reason why students with no credit history can receive a loan.

If lenders follow all federal guidelines for managing loans, if they provide any loans under the FFELP they are guaranteed repayment of most loans. The loan is turned over to the guarantor if the borrower defaults on the federal student loan. The guarantor reimburses the lender and continues to assertively pursue the borrower for their repayment.

Guarantors are not required to guarantee FDLP (Federal Direct Loan Program), because the U.S. Department of Education is the lender for the William D. Ford Federal Direct Loan Program.

Credit Bureau

The Credit Bureau gathers and stores credit information on individuals who borrow money. Getting a credit report is essential when applying for all PLUS loans and most private loans, just as it is when applying for other types of loans such as a car loan, mortgage loan, a credit card. The credit Bureau is called in when a credit report is needed for a loan application.

After you borrow, the lender reports to the credit bureau. Your credit report will show how much you borrowed and whether you are making payments on time. This information is then available to potential employers and creditors.

Hint: Your lender may also be your servicer. If you are in the FDLP, the federal government may take on the responsibly of the lender and guarantor in addition to being the program’s supervisory body.

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