Are you in need of financing? Everyone needs to borrow at some point in time - either to finance a house or remodel it or buy a new automobile or put the kids through college. Loans are the best way to finance a purchase such a house, automobile or even college education. With rising tuition costs, students are stretching out their federal loan options and increasingly turning to private lenders.
Take a look at micro loans, an arm of micro finance which is making significant inroads into social upliftment in developing nations. Look up student loan advice to guide you through the seemingly confusing world of student loans.
Micro Loans or very small loans are usually designed to alleviate poverty and create self employment opportunities. Micro credit and micro finance in the form of micro loans are going a long way in providing credit to those who are unlikely to get traditional credit.
Micro loans usually are up to $35,000 as per U.S. Small Business Administration guidelines. Typically micro loans are extended sans collateral and credit history. Micro loans are usually lent for a maximum of 6 years; but lending norms vary. Usually the borrower or business owner has to personally guarantee the micro loan. Interest rates on micro loans tend to be very high, nearly 20 % - 30 %.
Borrowers tend to opt for micro loans over the worse alternative of loan sharks. In most cases, micro loans require lesser documentation when compared to regular loans. An applicant for a micro loan must be above 21 years of age and need not have perfect credit rating. But factors such as outstanding tax liens, recent bankruptcy and recent delinquent payments might work against you. A micro loan can provide that vital capital gap that a small business requires to purchase new equipment or service a contract.
While many institutions specialize in micro finance, some traditional banks are also joining the lending bandwagon as it can be a source of future growth. High interests on micro loans are attributed to high costs of writing and administering them. Budding entrepreneurs in developing nations use these micro loans to start small business. Micro loans can be used for building inventory, working capital, purchasing machinery, equipment or furniture.
The social objective of micro finance through micro loans is to fight poverty, in developing nations. Repayment of micro loans ranges far above 90%, much better than student loan repayment and credit card debts in the US. Microfinance companies go to the areas of the borrowers; thereby aiding transactions. Microfinance organizations are funded by government grants, local banks, international institutions and social investors.
Student Loan Advice
The rising cost of higher education has necessitated most students to opt for student loans to finance their education. Federal Family Education Loan Program has been functional since it was first introduced in 1965. This student loan program accounts for most federal loans. Federal loans are available at both undergraduate and graduate levels for students enrolled in eligible programs at participating schools.
Stafford loans are long-term, low-interest loans student loans. The subsidized Stafford loans have the benefit of up to 10 years to repay it. Besides, the interest accrued on them during the study period is paid by the government. Those loans that are not subsidized carry interest even when the student is undergoing the program.
Perkins Loans are low-interest loans that can be availed by needy students in school. These government-funded student loans do not carry interest before the student graduates.
Parent Loan for Undergraduate Students (PLUS) program is taken by students' parents to finance their education.
Students can file for student loan deferment, if they are not in a situation to pay them when they fall due. As long as you comply with one of the conditions set by the student loan lenders, you can defer your loan once during its period of repayment.