Guaranteed Online Personal Loans

Unfortunately, no one can predict the future and what will happen in the financial world. Interest rates and stocks are said to be influenced by many random things—football winning scores, the weather and even birthdays have been said to affect our finances but whether or not you choose to believe that is up to you. When it comes to looking for a loan, one question that may arise is where or not you should lock your rate. Locking a rate means that you accept the interest rate that a loan officer is currently offering you. As rates rise and fall, sometimes locking the rate may or may not be the most ideal option. But, there are two sides to everything and we will explore both of those.

To Lock

Your instincts say yes to this question for a reason—it’s always a good idea to lock your interest rate. Loan officers are willing to offer you fare rates and even though the mortgage may not process for another 30 to 60 days, they can offer you the current rate when the loan closes. When approached with an excellent rate, the option to lock it is great. But if you are feeling a little wishy-washy about the interest rate that you being offered, then you need to ask yourself if you are a risk-taker or not.

Not to Lock

Being a risk-taker is not necessarily a bad or courageous thing. It just means that you are willing to see if the rates will either increase or decrease. If the rates have recently been dropping, you could probably feel pretty safe in floating for a while. They will probably continue dropping over the next two months. But, if there have been random increases and decreases, it is all up to you to make the call.

By locking into an interest rate you are telling the loan officer that you are agreeing to those certain terms. It is a promise, a contract, a deal. You wouldn’t ask the loan officer to change his agreement if the rates increase, so you couldn’t request a change if the rates drop either. You must be fair with them because they are trying their hardest to be fair. As always with financial matters, it is always a good thing to have open communication with your lenders. They are also willing to tell you what is going on and explain things to you if you are willing to make an effort to ask. If you feel like a loan officer is not giving you the best rate, check out other options and other financial institutions before locking down the first rate that is given to you.

Also, keep in mind that you have a few weeks to decide. If the first rate that you are offered does not seem fair or one that you are interested in, you are always more than welcome to wait it out and see what happens. If you do a little research and look at the most recent rates over the last few months, you may be able to notice a trend. But, don’t think that you can predict the future.

Evaluate Your Financial Position

College can be a hectic way of life with many ups and downs and unexpected challenges. However, for many young adults, the biggest shock comes after graduation, when you’re confronted with thousands of dollars in student loans that must be repaid.

Record low interest rates have made payments more manageable, but that is all changing. Federal student loan rates are adjusted every July 1st, based on rates for short-term Treasury bills, which have been rising.

If you are out of school and pay your student loans, you can shield yourself from higher rates by consolidating. You lock in the weighted average of all your loans up to the nearest one-eighth of 1 percent.

If you are not financially able to start paying off, or keep paying on, your loans, you are eligible for financial hardship deferments. If you consolidate your loans, you lose your ability to defer payments so make sure you are ready to make your monthly payment for 10 or more years before you consolidate.

How To Consolidate School Loans to Lower Your Interest

The general rule of thumb is that you should consolidate any Stafford loans that were disbursed before July 6, 2006. Graduates that consolidate during their grace period are eligible for a 0.6 percent interest rate reduction.

If you consolidate Perkins loans, you lose repayment benefits like loan forgiveness and a nine-month grace period, as well as subsidized interest during any deferment period. They also have a 5 percent fixed rate, so there is not an advantage to consolidating them.

When you consolidate, you can also stretch out the payment period for up to 30 years. By extending the term of the loan, you reduce your monthly payments, a useful feature for recent grads with little cash; but should consider paying it off way before then due to all of the extra interest you would be paying.

You can always increase your payments. There are no penalties for paying off your loan early. Not everyone can consolidate. Most lenders require a minimum of $7,500 in loans, and some set the minimum balance at $10,000.

Federal law prevents most borrowers who have already consolidated from doing so a second time, even if they locked in at a higher rate. And if all of your loans are with one lender, you’re required to consolidate with them unless they do not offer the service.

Shopping For A Loan Consolidator

Many lenders offer a quarter-point reduction for borrowers who agree to have payments automatically debited from their bank accounts. And some offer a reduction after you make 36 on-time payments.

You need to talk with several companies before making up your mind which company to go with. When discussing the terms of the loan, your research will pay off and you will be able to negotiate additional lower interest discounts if you have similar offers from other companies to compare.

Another good idea is to narrow down your choice by using a loan analyzer at Finaid.org. which will break down the discount rates in real dollars. This will help you to get a good idea of what each lender’s discount is worth over the long term.

This may seem like a lot of time and effort by doing all of this research, but it will pay off in the end. You will be paying this debt for many years and will want to know you have made the best decision.

What Is A Hardship Letter?

A hardship letter is something most companies will require to consider you for a “work out”. This is your opportunity to appeal to them to give you another chance. This should not be used to complain for what they have done or not done to make your situation worse.

This letter must be honest and represent the facts clearly. It must prove to them that the situation that caused you to fall behind is temporary and you are not in a position to make your payments on time.

You must also have a legitimate excuse for falling behind (which we shall discuss later) financial problems in itself would not be an adequate excuse. Remember, the hardship letter is only one piece of the workout.

The reality is lenders really don’t care what the person’s situation is; they simply want their money. The best option, however, is to contact the lender by phone and explain the situation so as to learn what the lender’s policy is in such matters.

A letter will likely get a response of “call this number” or something similar, if indeed there is a response at all.

If the party chooses to make the initial contact by mail the best thing is to keep it brief and to the point. Explain why it is not possible to comply with the original terms of the agreement, and request modification of the obligatory terms until your financial situation improves.

What Is Required In A Hardship Letter?

People understand that financial hardship sometimes occurs. None of us enter into a credit agreement knowing that at some point in the future we may have to back out or write a financial hardship letter.

A hardship letter is easy however; the hardship letter works with collection agencies in the event it has gone that far, where they will handle the process in exchange of accepting a small partial payment arrangement. If not, send it directly to the creditor that you first did business with.

Your letter needs to be sent to the collection agency (if they are involved) or to the original creditor to convince them to cut you some slack. The basis of the letter is anything that will prove why you are in the position you are in and why you are presently asking for help.

You must remember that hardship letters do not resolve your debts. And when you have completed your letter you must either fax the letter or mail it certified.

What The Letter Must Contain

Name: Your
Address: Your Address
Lender’s Name: and Your Loan Number or Identifying Information (other than name)

The letter should contain: the reason for default, an explanation of the hardship, the expected duration of the hardship, willingness to participate in a workout solution, desire to retain ownership (of what you have agreed or signed to with the lender).

Good Reasons

• Loss of Employment

• Medical Complications

• Disaster Victim

• Death

• Forced Relocation

• Disability

Poor Reasons

• You are a Student

• Legal Issues

• Filing Bankruptcy

• Overextended financially

• Pay Cut

• Purchased a Car

Basic letter breakdown: introduction, your offer to resolve your debt, your hardship situation, thanking them for their time, and your current contact information.

There is a current bill that is being debated Wednesday at the House Financial Services Committee to decide whether or not they should bar mortgage brokers so they don’t get bonuses to sign up borrowers for loans that are higher in price. This bill could also make lenders prove whether consumers are able to repay loans in their current financial situation or if that would be an impossible opportunity.

There are several other points that they are arguing about. Some of these points include “assignee liability,” which would hold private lenders and big banks responsible for bundling and reselling the loans of consumers to other lenders that are out there. This process is known as securitizing.

It could also allow for any borrowers to have their loan rescinded and then all of the money repaid to them if the lender doesn’t meet those requirements that are necessary to the loan. This can be huge for how many lenders have thrown out money to many people over the years of large financial growth and in turn many people not able to financially support payments for loans whether mortgages or other loans. We will keep you posted on what is going on amongst the committee members on this debate.

Countrywide, a major mortgage lender in the United States, has been under fire lately both on the financial front and from critics in the financial world. The lender experienced huge growth during the mortgage boom by extending large mortgages to credit-suspect borrowers. The loans it issued were very often of the ‘creative’ variety that involved low, interest-only or negative amortization payments that allowed people to buy much more house than they probably should have.

As interest rates have risen more and more Countrywide customers have experienced hardship and even foreclosure. But now the mortgage giant is doing something to help - they’re offering foreclosure prevention programs to keep more of its clients from defaulting on their loans.

A formerly harsh critic of Countrywide, Bruce Marks, has now teamed up with the company in order to protect and assist at-risk homeowners. Marks sounds positively ecstatic about the joint-effort. “Countrywide is going to restructure loans for people with unaffordable loans to rates that people can afford to pay,” Marks said.*

Countrywide is taking a two-pronged approach to helping distressed borrowers:

1. They’re offering low-cost refinancing to to over 50,000 borrowers that provide them with more manageable payments.

2. They’re offering some 20,000 other borrowers extended terms on their temporary low-rate loans.

The consensus from borrowers in trouble and consumer advocacy groups is that Countrywide is doing the right thing and making big steps in slowing and preventing the credit crisis in the US.

*Source: money.cnn.com