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Student Loan Consolidation, Look This Gift Horse In The Mouth.
By Ian McAllister, Sat Dec 10th
Student loan consolidation look this gift horse in the mouth.Part II ------------ ------------
Student loan consolidation is excellent - for for some people.Spot the hidden trap that could ruin your life... a cleveranimal can steal from a trap without being caught! ------------ * Part I Don't get into debt. Ways to avoid it. * Part II This article * Part III Idea beats student loan consolidation and creates awinning mindset. ------ Part II ------ Imagine two people Each has a student loan consolidation debt of $100 000. The bornloser will soon have borrowed more. The investor uses thestudent loan consolidation as a springboard to become amillionaire. What's different between them? The mindset, and only themindset. Get the right mindset. --------- The big trap --------- Have you a strong willpower? Will you go on a spending spree andowe $5000 on each card tomorrow? A student loan consolidation isnot for you. Read Part III of this article. Have you the will power to master your finances? Combine studentloan consolidation with Part III. ------------ What is Student Loan Consolidation? ------------ You transfer all your existing loans to one low-interestaccount. What's in student loan consolidation for you? * If you have Stafford loans in the USA, you'll have a graceperiod of six months after graduation to take out a student loanconsolidation. * Interest rates are lower * Easier to remember payment dates with one loan * Improved credit rating Credit cards might charge 20% interest. Wouldn't a student loanconsolidation at 5% be better? Look for extra discounts on student loan consolidation duringthe grace period. Do you get an extra discount after 2 years ofprompt payments. Do your homework properly. Were you only paying 3% fixedinterest on your Stafford loans and interest rates have gone upto 8% variable rate on your student loan consolidation? How highcould the rates go? If you get a fixed rate student loanconsolidation, and new student loan consolidations fall to 3%? Computers calculate your credit rating. Suppose you took out asubsidised and an unsubsidised Stafford loan for each of fouryears. Computers can't really think. They see that you have 8long-term loans and never paid back a single cent. You'reobviously a very bad credit risk before your student loanconsolidation! After your student loan consolidation
computers see that you'veonly 1 loan and you're making regular payments. They give you anexcellent credit rating. Don't spoil it with new credit carddebts. ----------- Avoiding student loans ----------- In part 1 you read about vital life skills that mean lowerstudent loans for student loan consolidation, or even none. Youcan make your money go twice as far, which means that you'lleffectively be twice as rich, and the IRS can't touch you for it. Without these life skills, you'll be helpless when you suddenlyhave to pay for food and lodgings, credit card, car loan,mortgage, health... it's never-ending! Many students can'thandle it. Part III will help you even if you have a studentloan consolidation. Have you decided on student loan consolidation? * Check how much they will lend * Can you consolidate your other debts... credit card and carloan? * Will you need proof of income? * Can you choose between fixed and variable interest? * Are there pre-payment penalties? Avoid them like the plague! * What are the penalties if you default? If you are unemployedor lack self-discipline you are likely to default. * What other loans must you get - mortgage, kid's schooling? Avoid lenders that make you start repayments of your studentloan consolidation the day after the grace period. Check forspecial incentives. A 1% discount after 2 years regular paymentsmay not sound like much, but it adds up over time. Negotiate. Lenders are eager to lend you money, however muchthey bluff. They are legally allowed to lend 35 times as muchmoney as they have, and they make no profit until they lend it. "No start-up costs" may be good, but low interest rates andabsence of prepayment penalties for your student loanconsolidation are better. ----------- What's in Part III ------------ A better alternative to student loan consolidation? * Build self discipline. * How will interest rates for student loan consolidation changenext 20 years? Don't know? Then student loan consolidation mightnot be the best bargain. * You'll be in control... not at the mercy of student loanconsolidation providers. Don't be a loan addict all your life. The ideas in part III wereused by an Australian to become a millionaire.
About the author:Ian McAllister managed to avoid student loans entirely. Read howin Part I. Also read about how to get out of debt.http://studying-techniques.com/student-loans.html (expanded partI) http://studying-techniques.com/student-loan-consolidation.html(expanded parts II and III)
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