Author: James Collins

Loans

Benefits of consolidating your student loans

by James Collins

College or university students are given loans by the state or by the government to help them in paying their fee. Some of these students will take numerous loans all of which have different monthly payments and interest rates.

Boosting your credit score

credit report

Even if a student benefits by getting loans from different sources, these loans can negatively affect your credit score. Consolidating your loans is on way d boosting your credit score. Having one combined loan will also lower your overall payment and thus make your credit rating more favourable. Also, this will greatly help you in lowering the ratio of debt to income.

Increasing your buying power

Your buying power will be increased by reducing the ratio of debt to income. Additionally, lowering the monthly debt payment and debt to income ratio is another great way of reducing the monthly bills. This will, in turn, help you in saving a lot of money over a lifetime.

Reduce overdependence on credit cards

Lowering your annual bills will ensure that you do not have to rely much on loans or credit cards. Sometimes you might come across a college student having six credit cards and a total balance exceeding over $ 2,100. As a student, smart financial planning will help you in living a good life that is free of debts.

Enjoy low interest rates on loans

10%

Interest rates keep on changing with time. For instance, the current interest rates are lower than how they were in the recent past. A high interest rate would raise your college bill leading to a high repayment. Consolidating your loans will enable you to enjoy the current’s low interest rates. Ideally, consolidated loans have a low monthly payment and a long repayment payment.

Receive interest rates discounts

There are many companies such as scholar Point.com that are specialized in consolidating education loans. Students who consolidate their loans are offered additional benefits including consecutive payments and auto payments.

  • Consecutive payments: Students who have consolidated their loans are given an opportunity of reducing their payment interest rate by a certain percentage. You will enjoy these payments once you make your payments in time.
  • Auto payments: This is the additional reduction in the interest rate that is offered when you make your monthly loan payments automatically from the bank after consolidating your student loans.
  • No interest deferral: Student’s loans are very flexible. students are given an opportunity of deferring their payments and stopping the interest rates from accruing once they are enrolled for postgraduate courses.

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Bankruptcy

Facts about bankruptcy

by James Collins

For many years, people have been filling for bankruptcy when they are in serious financial problems. Most of these people are heavily indebted. Filling for bankruptcy is the last thing a person can do in his or her life due to the shame and stigma associated with it. Owing to the plenty of misinformation that has been circulating in the neighbourhood and online about this state, anyone who is considering bankruptcy is advised to get the right information. The following are some of the essential facts about bankruptcy that will help you in making an informed decision when filling for bankruptcy.

It lasts for three years

Even if this is true, bankruptcy can be extended to five or eight years especially if the trustee is not provided with the required information for the first three years. Failure to fill in the required paperwork when someone is bankrupt can also lead to the extension of bankruptcy.

Filing for bankruptcy can make you lose some assets

beautiful house

Being bankrupt can make you lose some assets, but you cannot lose the general hose items and furniture. However, someone can lose his or her house if it happens to have a lot of equity in your property. Again you can also lose your car if it has a high asset value. Your business will also be considered as an asset if you happen to be self-employed. Getting some pieces of advice from an expert can help you in protecting or safeguarding some of your assets once you are declared bankrupt.

Filing for bankruptcy will make you lose your business

A bankruptcy trustee is supposed to sell some of your assets and then give that money to the creditors. The asset value of your business will determine if you will lose your business. For instance, a plumber cannot lose his old hand tools if their net value is very small. This means that his business will continue running.

You might lose your job once you file for bankruptcy

fired

There are some professionals that someone cannot do when he or she is bankrupt. This will mainly affect those people who are interested in moving to a different field or profession. For instance, you cannot join the police once you have been declared bankrupt, but those who are already in the police force cannot be affected as long as their bankruptcy was not as a result of illegal activities or fraud.

You might not lose your house when you go bankrupt

You will retain your house if there is little equity in your property but you will be expected to continue paying your mortgage for the bankruptcy term. Your house will be re-valued after three years to determine if there is any capital gain.

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