By - Antonio Hicks

How Should You Repay Your Student Loan?

Education is essential but expensive too. Most people are unable to pay all the cost involved in higher education from their savings or present earning. Some students also do not earn. Thus they end up taking student loans. But it is vital to know how to make its repayment.

When You Must Start To Repay Your Student Loan?

Most of the student loans come with a grace period of 6 months. It means that do not have to begin your repayments until 6 months before you become a graduate, drop out or below this half-time position.

A grace period will give you an opportunity of finding a job as well as start earning remuneration before getting flooded with your bills. The following loans include 6 months grace period:

  • Direct Subsidized and Unsubsidized loans
  • Subsidized and Unsubsidized Federal Stafford loans
  • Few Private Student loans

Plus loans come with no grace period. So start to repay them once they are completely disbursed. The grace period on the Federal Perkins loan depends on the financial institution that provided you the loan. If you took this type of loan, ask your school about your repayment time.

Private student loan’s grace period will depend on the loan provider and the contract of the loan. Most of these loans include a short grace period. But you need to check with your loan provider to ensure.

You can select to opt for student loan consolidation during the grace period. It will group your student loan into payment and then simply everything significantly.

If you take a federal student loan, you can select consolidation with the educational department via your loan provider or with any private loan provider. A private loan provider will be offering a lower rate of interest.

But it will be applicable to those who have a high credit score. If your credit is good and you want to reduce your rate of interest on your medical school loan, then, for instance, the best option will be to work with a private loan provider.

How You Should Get Prepared For Payments Of Your Student Loans?

  • Make use of grace period for researching the repayment options of student loans.
  • Prepare a budget that must be set up around your student loan
  • Payment of student loans must be prioritized
  • Converse with loan provider
  • Put up automatic repayments for avoiding any late fee
  • Avoid becoming a defaulter of student loan anyhow
  • Be aware of the right date when you should expect to repay the loan. So set a target for yourself so that you can plan accordingly.

How Much Repayment Should Be Done Every Month?

The minimum repayment every month depends on the loan type, owed loan amount, the duration of the repayment plan and the rate of interest. Typically students are provided 10-25 years to completely repay their federal loans. Short repayment time or a huge loan amount will cause high payments every month.

The Standard 10-year Repayment Plan is the most famous plan as many students have enrolled for it. But it does not imply that it will be the best one for you.

It is the default plan and any borrower has enrolled automatically in this Standard Plan until they select another one. You need to make fixed repayments each month for 10 years.

It looks like an excellent plan if a student can manage the monthly repayments and the affordable choice of long duration as he will be paying very less interest. But if he has no such income for supporting any such payments, he must enroll in any repayment plans that are income-driven.

Moreover, in making extra payments, you will be able to repay any amount that is more than your least repayment every month. No penalty will be applied for early repayment. By taking such an approach you will be able to save a considerable interest amount over time.

How To Make Repayments?

Once you bill is due, you should be responsible to send your payments each month to those companies who hold your loan.

If you are unaware of where you should send the payment, check out your school’s financial help office. They will inform you about your loan providers. You will get to know who they are and then you can contact them directly with any specific query.

But you should remember that your payments will be due even if you never receive any bill. If you relocate after you graduate, let your loan provider have an idea of your current address so that you receive the bills and can make regular payments without becoming a defaulter.

If you wish to create easier budgeting, you can consider changing the due date of your loan. The loan repayment can be due every month before you get your paycheck.  Get in touch with your loan provider to find out if your repayment date can be directly switched to any date after you are paid.

If you are unable to make your repayments, you must inform your loan provider. Review your repayment choices instead of not paying anything and creating a default.


By - Antonio Hicks

Get An Idea Of Bank Loan For Startup Business

In a start-up funds play a pivotal role and securing it is one of the biggest challenges for entrepreneurs. As there are several options available related to funding, it is important to understand the available schemes carefully and then choosing one wisely by understanding the financial position and the requirements.

Do Banks Offer Start-Up Loans For A New Business Venture?

There are many investors and capital firms who invest a lot of funding to these start-ups along with that there are banks who also provide funding for the start-ups however entrepreneurs are not that much aware of that fact. In U.S., banks are one of the largest funders for the start-ups each year. Banks and financial institutions provide financial assistance to the companies in all stages of a business lifecycle. Start-ups can lend the funding as a working capital or asset backed loans depend upon the desideratum. Banks used to lend if they find the business model is sustainable. They examine the returns from the business and whether the business has the potential to pay back the loan along with that management experience and expertise play a key role in this.

Do Banks Offer Start-Up Loan To Businesses Beginning In Unusual areas?

In order to get a funding for your start-ups in unusual area, there should be a proper business model. Banks usually insist on higher collateral security coverage typically with other sources of income. If you can provide the same, Banks will definitely lend you the funding for the start up with novel business models.

Can A Start-Up Get Bank Loan For Research Work And Technology Development?

It is possible that you can get a start-up loan for research work as well as technology development from banks. Any loan that is backed by asset can be utilized to develop latest technology as well as marketing or any other efforts for expansion of a start-up venture. Loans backed by asset will be provided typically depending of the market value of any residential, commercial and industrial property that will be pledged. Apart from the collateral that will be offered as a security, an individual also need to make the bank understand the expected financial returns from their business and funds’ source to meet the interest as well as principle of the loan that will be scheduled on time.

Can A Start-Up Loan Be Availed To Buy Equipment Or Machinery?

Any start-up can get hold of term loans to buy equipment or any machinery. Banks extend the loans for any purchase and commissions of any capital asset like machinery or equipment for using it in the business.

Can A Start-UP Loan Be Obtained For Stocking Inventory?

If you are going to begin a start-up venture, you can get a loan from banks for your stocking inventory or to provide credit to consumers. Banks usually try to assess working capital need of any business on the basis of the projection that is provided as well as take a conservative approach for lending any working capital amount.

Will It Be Possible For A Start-Up To Get A Bank Loan Without Collateral?

If you are planning to begin a new business, you must be eager to know how to get a start-up loan without collateral for financing your ideas. There are two main types of loans; unsecured as well as secured. The major difference between these two types of loans is that the first one needs an asset that will be acting as a security i.e. you will require collateral. But the second type of loan comes with no such necessity. There are some start-up loans that are accessible without any collateral. They are not easy to get hold of or readily obtainable like standard secured loans.

How Should You Approach A Bank Or Private Loan Providers For Start-Up Loan?

Before you approach a bank or any private loan provide with a request for financing your business, you need to prepare one such pitch that will explain your business model, your background, the revenue model projected sales, profit, rate of growth as well as returns. Return on the investment is a major factor for banks and also equity investors. So it is crucial for you to collect, acquaint and also compile all details in a presentable report at first. Once you are ready with your investment pitch, you need to identify the prospective banks that include schemes or any facility to provide the needed funding. You need to make up your request in such a way that it will suit into the framework of all the financial institutions lending policy. So you should not request for funding at any institution that only offers term loans. After completing these two steps, you can approach a financial institution or private lender and exhibit your pitch as well as funding request to them.

Thus you are aware of the available financing from banks as well as private loan providers. You must understand your situation well and then opt for the most viable funding option accessible to you. This way you will be able to manage the required fund for your start-up venture.


By - Antonio Hicks

How Can You Get A Start-Up Loan?

If you are about to run a start-up, the biggest challenge will be finding the right financing to meet your operating costs as well as balancing them with the expanding need.  So mentioned below are some of the ways by which you can get a start-up loan for your new venture.

  • Start-up Consultants:

Starting a new company includes many challenges. The truth is that half of these new businesses will not be able to last for at least 5 years. If you make a wrong decision such as get the wrong funding, it can drown you in the early years. So make use of a start-up consultant. Such consultants usually will be charging a premium for connecting you with financing and it will be worthy. Before getting hold of funding, they will be checking your funding viability and ensuring that you are well covered with all the essential services that any start-up requires like creation of a business plan to insurance and so on.

  • Equipment Funding:

Traditionally banks are one such financial institution that is popular for their lending chances. So if your relation with your bank is good, you can look up to it for funding your start-up. But for a large number of start-ups, traditional loan is never the perfect option. Banks will show stringent lending standards. Moreover whatever they have to offer is mostly only accessible to all established businesses. You may be able to work with the bank for securing equipment funding. It is designed specifically for paying for equipment as well as machinery purchase. Equipment loans are same structurally to conventional loans and have repayment terms for each month over a long duration. Further, these proceeds must be used only for purchasing any equipment or machineries. Lending standard on these funding will be not so strict as the equipment will get used in the form of a collateral for your loan. So if you become a defaulter, the bank will be having the right of seizing your equipment for covering the expenses of their money that is lost.

  • Microloans:

Apart from 504 loan program as well as SBA 7(a), SBA will also be offering microloans that are made via community development financial institutions as well as non-profitable organizations. It is accessible till $50,000 and can be used as a working capital or to buy inventory, supplies, machinery, equipment, fixtures as well as furniture.  Other than SBA, there are also other micro-lending options. You can check two options such as:

  • Accion:

    Till $10,000 it is available. It is an excellent start-up loan if you are in business for less than 6 months and own any home based business. As the required credit score is 575 or more, it is a great option for borrowers who do not have a strong credit.

  • KivaZip:

    It works on a large community based platform that is driven by trust. Start-ups can crowfund start-up loans from individuals who are philanthropic minded and it can be till $5000. Such loans have a 0% APR and are offered to entrepreneurs who struggle a lot and have proved their characters, invited their individual lenders, were not able to get access to other funding means as well as owns a business that comes with a recognized positive impact on the society.

  • Personal Funding:

It is a viable option. But making use of personal funds will be a huge gamble. You must do a proper calculation of your expenses. Thus you will not be running short of money before your start-up can add support to itself. If you use personal funding for starting your new venture, it is always advised to start establishing your business credit immediately. Thus you will be able to leverage your business credit and get access to more capital later. Your business will also be able to become established itself rather than involving your credit as well as personal assets. There are also some options of personal funding such as:

  • Personal Credit Card:

    If you are unable to secure your business credit card, then look out for a personal credit card with a high limit. It will aid you in getting all the initial few purchases as well as your business in the beginning. Focus on the way you utilize your credit and clear off all the bills timely as making any business expense on your personal credit card will be ruining your personal credit report.

  • Savings Or Home Equity:

    Making use of your savings is very risky. But if there is enough money that is kept aside, it will be your cheapest option. You can also borrow money against your home for your start-up as it will be a cheap option too.

  • 401k:

    If you have a plan of incorporating your business, your retirement plans such as 401K or IRA savings can be used for investing in your company. Remember that it might not be a good idea to invest the entire retirement savings upon your start-up business. A person who applies for a start-up loan needs to be aware of his needs and financial position because he has to repay the loan and other costs incurred from the daily activities of the business.