student loan

An education loan is a form of financial aid that must be repaid, with interest. (Scholarships, on the other hand, do not have to be repaid.)

Education loans come in three major categories: student loans (e.g., Stafford and Perkins loans), parent loans (e.g., PLUS loans) and private student loans (also called alternative student loans). A fourth type of education loan, the consolidation loan, allows the borrower to lump all of their loans into one loan for simplified payment. A recent innovation is peer-to-peer education loans.

Federal law sets the maximum interest rates and fees that lenders may charge for federally-guaranteed loans. Nothing prevents a lender from charging lower fees. Many lenders offer a variety of student loan discounts to attract borrowers.

Few students can afford to pay for college without some form of education financing. Two-thirds (65.7%) of 4-year undergraduate students graduate with some debt, and the average student loan debt among graduating seniors is $19,237 (excluding PLUS Loans but including Stafford, Perkins, state, college and private loans), according to the 2003-2004 National Postsecondary Student Aid Study (NPSAS). (The median is $17,120. One quarter of undergraduate students borrow $24,936 or more, and one tenth borrow $35,213 or more.) For federal student loan debt (excluding PLUS Loans), the figures are 62.2% and $17,036. Average cumulative debt increases by about 3% or approximately $550 a year. When one includes PLUS loans in the total, the average cumulative debt incurred is $21,899. (Approximately one in ten (10.8%) parents borrow PLUS loans for their children's college education, with a cumulative PLUS loan debt of $16,317.)

The following table shows the percentage of students borrowing and average cumulative debt per borrower (excluding PLUS Loans) according to type of educational institution.

	Undergraduate Education Debt
Institution Level & Control	Percent Borrowing	Cumulative Debt
Overall Total (4, 2 and <>	55.5%	$15,766
4-year Total	65.6%	$19,202
4-year Public	61.7%	$17,277
4-year Private Non-Profit	72.8%	$21,957
4-year Private For-Profit	87.3%	$28,138
2-year Total	37.4%	$9,897
2-year Public	33.2%	$9,387
2-year Private Non-Profit	69.1%	$12,326
2-year Private For-Profit	90.0%	$12,107
<>	67.1%	$7,271
<>	34.0%	$7,243
<>	26.5%	$4,854
<>	77.3%	$7,311

Graduate and professional students borrow even more, with the additional debt for a graduate degree ranging from $27,000 to $114,000. The following table shows the percentage borrowing and average amount of cumulative debt per borrower among graduating students according to degree program. It provides the amounts borrowed for just the graduate education and also the combined totals for undergraduate and graduate education.

	Graduate Education Debt		All Education Debt (Grad & Undergrad)
Graduate & Professional Degree Programs	Percent Borrowing	Cumulative Debt	Percent Borrowing	Cumulative Debt
Total	60.1%	$37,067	70.1%	$42,406
Master's Degree	58.4%	$26,895	69.3%	$32,858
Doctoral Degree	51.0%	$49,007	58.3%	$53,405
Professional Degree	86.5%	$82,688	88.4%	$93,134
MBA	53.0%	$35,525	63.6%	$41,687
MSW	76.5%	$27,136	81.0%	$37,029
PhD	40.0%	$36,917	46.8%	$41,540
EdD	53.4%	$49,050	65.7%	$47,725
Law (LLB or JD)	87.7%	$70,933	89.7%	$80,754
Medicine	95.0%	$113,661	95.0%	$125,819

Grants, scholarships, work-study and other forms of gift aid just do not cover the full cost of a college education. Many students find that they must supplement their savings with government and private loans. The Federal education loan programs offer lower interest rates and more flexible repayment plans than most consumer loans, making them an attractive way to finance your education. You can also deduct up to $2,500 in student loan interest even if you don't itemize deductions on your income tax return.

The interest rate on the Stafford Loan for new loans first disbursed on or after July 1, 2006 is a fixed rate of 6.8%. The same rate applies to the in-school, grace and repayment periods. (A lower interest rate is available on subsidized Stafford loans for undergraduate students for loans first disbursed on or after July 1, 2008 through June 30, 2012. The rate in 2008-09 is 6.0%, then 5.6% in 2009-10, then 4.5% in 2010-11 and 3.4% in 2011-12 and returning to 6.8% for new loans in 2012-13 onward.) The interest rate on new PLUS Loans first disbursed after July 1, 2006 is a fixed rate of 8.5% in the FFEL program and 7.9% in the Direct Loan program. The interest rates on existing variable rate Stafford and PLUS loans will continue to change annually on July 1, based on the last 91-day T-bill auction in May. The current interest rates on the Stafford Loan are 3.61% during the in-school and grace periods and 4.21% during the repayment period. The current interest rate on the PLUS Loan is 5.01%. FinAid recommends that students who have not yet consolidated their variable rate loans consolidate them now to lock in the current low rates. Interest rates are expected to start increasing again in 2009-10. Borrowers may be concerned by the possible impact of the subprime credit crisis on the cost and availability of federal and private student loans. Federal loans will remain available, although loan discounts will likely be reduced significantly. A higher minimum balance may be required to consolidate. Private student loans will likely have stricter eligibility restrictions, requiring a higher credit score or a cosigner. There may be increases in the interest rates and fees on private student loans. Lenders will encourage borrowers to make payments of interest while they are in school.

Many student loan providers offer low cost government and private loans with consistently high quality servicing and flexible repayment terms. Citi Student Loans is one of these lenders. FinAid maintains a list of education lenders, guarantee agencies, servicers and secondary markets who offer federal and private student loans, as well as advice on preferred lender lists and choosing a lender and tips on identifying the lenders that currently hold or service your loans.

Loan forgiveness programs (in which the borrower's loans are paid off in exchange for volunteer work, public service or military service) offer an option for easy repayment. If you are having difficulty repaying your education loans, see Defaulting on Student Loans before you decide to skip a payment. It offers you some alternatives. Loan Cancellation and Discharge Forms can be found on the US Department of Education web site.

Also, FinAid provides numerous calculators that can help you better understand your borrowing options. The loan calculators offer estimates of monthly loan payments, estimates of the amount of debt you can afford to repay, an analysis of the cost of capitalizing the interest and tools for comparing loan costs.

Use FinAid's Student Loan Checklist to keep track of your student loans.

Some students, because they do not have prior experience with debt and loan amortization, do not appreciate how much their loans will cost them. FinAid provides some tips concerning calculating the cost of interest.

A fair deal for your Business!

Have you taken a moment to consider whether the current banking arrangements for your business offer the best value? Have you ever felt that maybe your charges may be too high or that the interest charged on your loans or overdrafts may not be competitive?

It is a well publicised fact that it takes the average business at least 14 hours of shopping for the best deals if they intend to switch bank. Charges are often complex and confusing and many business owners simply cannot spare the time.

Rainbow offers an independent service that aims to review your existing commercial banking position and offer a comparison with other banks. Rainbow will act on your behalf to broker a better deal for you and your business with the aim of reducing a frequently overlooked cost.

Alternatively, if you would like to call us direct, please feel free to contact us on 0845 8686507 to speak to one of our consultants.

With a wide range of life insurers we get the best quotes for you!

At Rainbow, we work with most of the top life insurers in the country to not only find you the best quote but also the most comprehensive policy.

Its time to stop worrying and start enjoying life. We have insurance products from a range of insurers to give you some of the best competative quotes

Life Insurance

There are few certainties in life, one such certainty is the fact that sooner or later we all die. Understandably, a lot of people do not like to think about this subject. Normally, people only think about the consequences of death after it has happened, at which time it is too late.

To avoid your loved ones being financially unprepared for death it is wise to consider what would happen, if yourself died? or if you suffered a serious illness?

You need to ask yourself the following questions:

• Are you the main earner in the household?
• Who will be affected?
• What impact will it have on you and your loved ones?
• What would you want to happen?

Once you have answered these questions you will, more than likely, be concerned that you need to arrage to have some form of financial protection in place to protect yourself and your family.

Car Loans

Our excellent car loan and finance products means whatever your credit history we like to try and say...Yes.*

Rainbow provide Car loans for all different types of people. You may have an excellent credit rating or may have had previous financial problems. DO NOT worry we are here to provide loans from the top lenders in the UK market place.

Our team will search through hundreds of loan options from personal loans to hire purchase loans. Be rest assured that no one try’s harder to get you that car loan.

Over the years we have helped people who had previously had there loan applications turned down. We have also got people some of the lowest APR rates out there.

At Rainbow we pride ourselves on trying to source all the different types of people. So if you need that Low rate Loan or been declined before then you need look no where else!

• You have been turned down by another lender
• You are looking for a low rate.
• You have CCJ's, Defaults or Arrears.
• You have little or no credit history.

We can also finance people with licences from the European Economic Area (EEA). Here is a full list of European Licences we can now accept.

Borrow between £1,000 to £100,000 with payments spread up to 5 years at competitive rates. So for a low rate car loan, simply complete the quick loan application and Rainbow will do the searching for you Low Rate Car Loans.

Personal loan

Get the Personal loan you need Quick and Easy! Rainbow Personal Loans search over 200 loans plans from many Lenders to find the best loan that sorts your circumstances.

Personal loans can be for refinancing your credit, buying a Car, booking a holiday or even that dream home extension.

Whether your past history is excellent or tainted. You have adverse credit, mortgage arrears, CCJ’s or even no proof of income. Rainbow has the experience and knowledge to find you that personal loan. Whether you require £5000 or £250,000 we have the companies and loan plans for you.

Don’t worry if you have been unsuccessful in the past, our quick and easy application form will put all the work in our hands leaving you to relax and plan ahead.

Want to Become Credit Card Savvy? Just Follow Five Simple Steps

Credit cards are a necessity in today's world. The good thing about credit cards is that they let you make purchases, when cash isn't an option. The not-so-good thing: They tempt you to impulsively charge items you don't really need. Keep in mind that every time you use credit cards, you're borrowing money. So think of credit-card debt as a high-interest loan, and consider these five smart ways to use credit cards.Shop Around
Shop around. With hundreds of credit cards to choose from, it's smart to shop for the best deal--a card with no annual fee and a low APR (annual percentage rate)--advises a financial consultant of a credit repair company in New York, often dramatically, particularly if you make one late payment.

If you plan to pay your bill for credit cards in full each month, look for a low annual fee and a long grace period--the time between the statement date and the payment-due date in which you'll avoid finance charges. If you plan to carry a balance, go for the lowest interest rate. Also look for a low rate on cash advances.

There are a lot of credit cards that offer great rewards and benefits. Usually there are some annual fees attached to credit cards that have great rewards. However, these rewards may outweigh the annual fee significantly so you will still save even though there is an annual fee attached to that credit card. Some credit cards offer great rewards and no annual fees. I have picked several great credit cards with no annual fees that offer excellent rewards and high credit limits. You should pick a card with reward that you think will be most appropriate for you, so you can save. If you pay your balance in full each month then the APR interest rates will not apply to you, so you should ignore it. The most beneficial credit card will be the one that has rewards and no annual fees. Also, look for a credit limit when applying for a no annual fee credit card. Annual fees are usually low; they range from $20 to $100, so a credit card that has great rewards and has an annual fee may be more valuable to you then a credit card with no rewards at all and no annual fee.

Improve Your Credit Record
A credit report is a snapshot of your debt-paying activity; your credit (FICO) score--a number from 350 to 850--predicts whether you're a good credit risk (above 620 is considered respectable). The higher your score, the better your chances of getting a low interest rate on credit cards, car loan or mortgage. Charging near the limit or maxing out credit cards can lower your score, Martin says. Get a copy of your credit report at least yearly from the three major credit bureaus (Equifax, Experian, Transunion). You should challenge if there is any error. Under a new law, by September 2005 all consumers will be able to get a free credit report.

Restrict The Number Of Cards
A wallet filled with credit cards (which represent money you owe or can borrow) may work against you, when you apply for a loan or mortgage. Two or three credit cards are enough, Martin says. If your credit report indicates you already owe or can access a great deal of money, potential creditors may determine that added debt could strain your ability to repay.

Switch Balances Cautiously
If you transfer your high-interest balances to a low-interest credit card, be aware that the low rate may last for only a limited time, and that many credit card companies assess transaction fees, sometimes up to 4% of the amount transferred. Avoid credit cards that charge hefty fees, which may outweigh any savings offered by a lower interest rate. Scrutinize the application or call a company representative and ask about all charges before signing up. Once you transfer the debt, stop using the old card.

Avoid Credit Pitfalls
Despite the benefits of using credit cards, there are pitfalls that accompany. It can be costly, with some interest rates higher than 25% and whopping annual fees, finance charges and penalties that can jack up the purchase price. And you risk spending more than you can pay. Calculate how much you can afford to charge each month and then put your receipts in an envelope and keep a running total on the outside. Once you reach your limit, put away the plastic.

Types of Debt Consolidation Programs for People with Bad Credit

If you are in debt and each month you find yourself farther and farther behind on your payments, you may feel as if there is no way out. Luckily there are many companies out there who can help you get out of debt now and teach you how to stay out of debt in the future. The most common way to get relief from your mounting credit card debts and loans is to use a debt consolidation service.

Most credit counseling services can help you consolidate your debt into one monthly payment. You will no longer have to worry about forgetting a payment, and falling further into debt, when all of your debts are rolled into one easy payment. On top of this, most credit counseling services are able to work with your creditors to make sure that you are paying the lowest possible monthly payments and often times your debt consolidation loan will have a lower interest rate than your high interest credit cards.

The most common way to consolidate your debt is to take out a home equity loan. By utilizing the money you have already paid towards your home, you can pay off high interest credit card debts before you get charged more late payment fees and over the limit fees. Home equity loans are usually much lower interest then credit card interest, or auto loan interest. The key to getting a great rate on your home equity loan, and achieve your first step towards debt consolidation, is to be proactive. The better your credit the easier, it will be to get a home equity loan and you'll get a better interest rate, too.

Unfortunately many people don't realize they are in trouble with debt until they already have bad credit. Others who have bad credit and mounting debts don't have a home or don't have enough equity in their home to pay off all of their debt. Even if you find yourself in one of these categories, you can still get relief from your debt. In many cases even non-homers with bad credit still qualify for unsecured debt consolidation loans. These unsecured loans will not have terms that are as favorable as a secured debt consolidation loan, like a home equity loan, but they may be the thing you need to get relief from your mounting credit card crisis.

As with many debt relief options, the key to getting out of debt quickly and easily is to find a great credit management company to help you do it. There are, unfortunately, many less than legitimate companies out there that prey on people with bad credit. You should never feel as though your credit situation has left you with no options to get relief. Even people with bad credit can be helped by a reputable credit counseling company.

Looking For Fast Cash? Get Quick Loans With Paycheck Loans

Everyone has emergencies pop up in their life sometimes. These unplanned events can be costly and potentially crippling if you don't have enough money put aside to remedy them. If your car suddenly breaks down and you have no way to get to work, you can't simply wait until payday rolls around to get the repairs done. When you find yourself short of cash and in high need, there are several types of cash advance services that can help get you out of trouble with some fast cash.

Most types of cash advance services are quick loans based on paycheck loans. You provide the cash advance service with a bank statement and pay stubs. They calculate how much money your next paycheck should be for and they simply advance you that money early. These are very short term loans that are meant to be paid off within a few pay periods.

The downside of these payday loans is that your fast cash usually comes at a big price. These types of cash advance services and payday loan establishments normallycharge a fairly high fee for taking on the loan and they charge an interest rate that is many, many times what a traditional bank or lender would charge. You may wonder then why so many people use these types of cash advance services. The single biggest reason is probably their speed. Usually within less than a days time you can apply for the loan and be granted the money you need. In an emergency you don't have time to go through the much slower loan process seen at a traditional bank. Another reason why they are so popular is because most banks have restrictions on the minimum amount of money you can borrow. It simply isn't profitable enough for the bank to loan you a couple hundred dollars on a car repair when you compare that to the money they make off of a house that costs several hundreds of thousands of dollars.
More so than that, these types of payday advance services are willing to loan money to high risk, poor credit, clients that a traditional bank would see as being to big of a risk to lend money to. Part of the reason why people pay such a high interest rate at payday loan places is because of how shaky their credit history is. The high initial fee helps offset the businesses loses if you do not repay the loan.
Because of these reasons, you should only take out a fast cash payday loan when you are really in desperate need of the money. Ultimately, whatever you take the loan out for costs you many times the initial vast of the loan due to the high interest rates.

Personal Loans Are The Source Of Instant Cash During An Emergency

A wide variety of personal loans come with different rates of interests. Zeroing in on specific personal loans with a suitable rate of interest is a mammoth task and requires a planned approach. With a huge risk factor being a part of personal loans, it's always advisable to look up for alternative options to get loans. If you are fortunate enough to have a rich relative who can be your sponsor, you're lucky! The other options like home equity, credit cards, and 401(k) loan are any day better than going in for personal loans. But if you are left with absolutely no choice or want to stick to personal loans as your cash source, you better consider these tips before you borrow personal loans.
- Point number one is to get the facts straight. Do not take up personal loans without weighing the pros and cons. One way to do this is to go to online financial websites and compare the interest rates on various loans. Alternatively, you can also call the local banks in your area to learn the interest rates they offer on personal loans. This could give you a fair idea of the value of personal loans you'd be opting for.
- Don't forget to inquire about the rate cap and if the interest rate is fixed or variable. Also get some information on the annual fees.

But if you are a member of any credit union, the above-mentioned tips on personal loans are not for you. In this case, you are at an advantage. That's because credit unions offer interest rates that are 1%-2% lower than any multinational banks.

If you are regular customer of a community bank, you may even enjoy low interest rates on personal loans. Just make sure that you furnish true information to the bank to procure the loan. You might just get lucky to get a loan with fantastic interest rate. Also, don't be in haste to apply for personal loans in many banks. This could be more of a disadvantage to your prospects of getting personal loans. This has a direct bearing on your credit score. Any hasty move on your part to get personal loans could make your credit score go for a nose-dive.

So, what does this teach you? Start making sincere efforts to bring down the interest rates on personal loans by improving your credit history. If you blindly follow your bank's criteria for personal loans, your brand loyalty could cost you dear. A survey done by Intelligence Finance just goes to prove this fact. Coming back to the personal loans with low interest rates, Egg clearly states that some of these could be mere traps to fool the common man. There is only a very small fraction of borrowers who get all the benefits that are stated while taking the personal loans.

While each type of personal loans has its own plus points, the unsecured type outshines the rest. A major benefit with personal loans is the least time required for its processing. That's because it requires only the application form and your credit score for processing. You may get an answer from the bank within three business days of applying for the loan.

But always remember that personal loans should be the last option when you need money to make any purchase. It's always a better idea to postpone the purchase until you've saved enough money to make the purchase. Layaway or other modes of payment could be a better bet than applying for personal loans. So, plan out your requirements and then you can take an informed decision on borrowing personal loans.

The bottom lone is, while personal loans give you ample financial freedom to make any type of purchase, any wrong move on your part could spell disaster. Study the terms and conditions of the personal loans before you commit yourself to the financial institutions.

Student Loans: A Debt That Can Haunt You

Student loans are one of the few types of credit that can haunt you almost forever. When it comes to taking out credit cards and loans, there are rules that all lenders must abide by, but many of these "normal" rules do NOT apply to student loan lenders. With most lenders they cannot legally sue you or take control of your assets (bank account, lien, etc) once the debt is past your state's statute of limitations (SOL). For some states this is as short as 3 years after the debt's date of first delinquency (the last "30+ days late" before the debt was charged off or sent to collections) and for others it can be as long as 15 years. Additionally, creditors are also not supposed to report the account on your credit report longer than 7 years after the debt's date of first delinquency. Now, the SOL on your debt will depend on your state's laws, but the 7 year reporting period is the same for everyone. With student loans, these protections are slim to none.
When to comes to student loans, you can be legally sued for the debt until it is paid. As a matter of fact, most of the time an actual court date and appearance are not even necessary. It is now more easy then ever for a student loan lender to gain access to your bank account without even notifying you first. Another possibility, and probably even more popular than grabbing funds from a bank account, is to have your paycheck garnished. This would happen in much the same way as it would for a child support debt or any other 'special debt'. This can be a surprising event when it happens, and can put you in a hard position when it comes to paying your other bills -- especially if you normally have little to no money left over after your usual bills are paid.

The best thing to do is to keep up on any student loans that you have. Student loans are structured to help the debtor out as much as possible. This is one reason why the laws are lenient when it comes to collecting these debts. First off, many lenders will only require you to pay $50 or so per month, especially if it is back by the Department of Education. Secondly, you can file for deferment if your situation qualifies for one. If you are now back in school, you can qualify for a deferment. If you are on public assistance, you can qualify for a deferment. You can check with your lender for a full list of deferment options that are available to you.

Lastly, if you are already in collections for your student loans, you may be able to 'rehab' them. This is a privilege that you have to specifically inquire about. No one will offer it to you and if you pay without looking into this option, you may be punished for it via your credit report. This is because, if you do rehab, the collection listing on your credit report will be removed once rehab is complete. If you pay without going through rehab, the collection listing will stay on your report for 7 years. Even if you cannot defer or rehab, taking care of your student loan debt as soon as possible is the best choice for any debtor.

Auto Loans

Auto loans dealers frequently make announcements of zero percent auto financing and buyers eagerly make a grab for the great deal. It means a $20,000 vehicle can fetch you savings in thousands versus five-year auto loans with interest. However 0% car financing isn't available for all. By making an offer of letting you drive away a new car with zero percent financing is an ideal ploy for the dealer to lure you to his lot. There are many people who have the misconception that they could afford an even more expensive car with no cost auto loans as there will be no interest to be paid. Unfortunately this happens very rarely.
You may have noticed that in the commercials for zero percent car financing on television, the print is so tiny that you require a magnifying glass to be able to read. The fine print lays down so many conditions of eligibility that eventually there are very few who can actually get a great deal with the dealers. Finally you may be likely to realize that auto loans with an interest rate offer better deals.

Zero percent financing excludes more people than it includes. It takes credit report into consideration to qualify for these auto loans financing and the guidelines for credit are extremely demanding too. You require perfect credit to be eligible for these deals and the average borrower is likely to have at least one imperfection in his credit report. That's all it takes to mar one's chances of availing zero percent financing. However by this time you will be acquainted with the interest rate of the dealership making you feel like you already own the car. This is to the dealer's advantage as he bases your interest into improving his bottom line.

Another thing about zero percent auto loans is that dealers generally have the offer only on some select vehicles. Nine times out of ten it will be the slow vehicles that come with this deal. In other words it is the dealer's attempt to get rid of vehicles. If you actually want a slow moving vehicle, it makes a great deal. However for most the car of their dreams is not in the least bit likely to be covered by the zero percent auto loans financing.

There is also the likelihood that only the cars in the lot will be offered. Despite being interested in a vehicle that is covered by the best financing auto loans offer, the color or seats of leather may not be what you desire. Then the dealer will be only too happy to offer to provide you a vehicle with all your preferences but this will mean that the interest free auto loans no longer cover it.

Generally, you will also only be offered the cars on the lot. Even if you are interested in the vehicle with the best financing auto loans options, you may want a different color or changed accessories. The dealer will gladly find a vehicle for you with all of the options your heart desires but your interest free auto loans will no longer come with it. Interest free auto loans offers are also frequently of a much shorter duration than the typical auto loans. They usually don't exceed 36 months when most people prefer to finance a new vehicle for 48 to 72 months. Due to this the payment on auto loans will work out to be much higher even if no interest is charged. Thus there will be a substantial increase in monthly payment with zero percent cars financing as opposed to conventional auto loans. Most borrowers are likely to feel that it's better to pay interest in order to keep the payment reasonable.
Therefore the next time your attention is on zero percent car financing, don't assume that it might be the best deal available. Instead check out other car financing options and think realistically about your chances of qualifying. After all it is the informed buyers who are always the best buyers.