What the student loan rate hike means for a borrower’s bottom line

When the interest rate for a key type of federal student loan doubled on July 1, how did that affect borrowers? There are several ways to answer that. One is to look at the difference in payments for a student who borrows the maximum possible through the subsidized Stafford loan program. The subsidy means that those loans, for students with demonstrated financial need, don't accrue interest while the borrower is in school. Before July 1, the rate was 3.4 percent. Now it is 6.8 percent. Congress is debating possible changes. Here's how the numbers stack up, with credit for help from education policy analyst Clare McCann of the New America Foundation, using a repayment calculator on an Education Department Web site. The most a dependent undergraduate student can borrow via these types of loans is $23,000. At 3.4 percent, assuming a standard 10-year repayment plan, that student has a $226.36 monthly payment. That would mean, over the lifetime of the loans, paying $4,163.40 in interest. At 6.8 percent, assuming the same terms, the student has a monthly payment of $264.68. Total interest paid would be $8,762.17. The monthly difference: $38.32. The total difference: $4,598.77. It's also important to remember that dollars paid 10 years from now will be worth less than dollars paid today because of inflation. Students take out new loans each year. Assume our hypothetical maxed-out borrower is in college four years. The net difference, per loan, per year, for this student is about $1,150 in interest. The typical student, however, might borrow significantly less than the maximum.

Develops First Ever Singapore "What-If" Home Loan Calculator That Adjusts to Fluctuating Interest Rates

FindaHomeLoan.sg Develops First Ever Singapore "What-If" Home Loan Calculator That Adjusts to Fluctuating Interest Rates Jul 2nd 2013, 08:24 Singapore (PRWEB) July 02, 2013 With such a healthy economic vein running the region, Singapore has become a sought-after real estate market that offers unparalleled healthcare, education, traffic system and overall infrastructure. It is no guess why many are flocking to invest in the booming real estate markets in Singapore, especially with low interest rates. However, with so many financial institutions and home loan packages to choose from, it is also a challenge for buyers to apply for suitable home loans. It is from this predicament that the founders of home loan comparison website FindaHomeLoan.sg developed a groundbreaking comparison portal for comparing the best home loan rates from Singapore-based banks for properties in Singapore, Malaysia, Australia, United Kingdom and other countries. "We recognized the gap in the market where property buyers might not be well-served in your interests. Not only is the portal free-to-use, our mortgage consultants will understand your needs and help you in deciding the choice of home loans, without advisory fees," said Sean Lim, Founder of FindaHomeLoan.sg. The portal boasts the most comprehensive home loan calculators available online, comparing rates for New Home Loans, Refinancing and a first ever "What-If" calculator. The New Home Loan calculator allows users to choose properties by type and completion status, and then filters results by floating rates, fixed rates and interest offset rates. It then calculates monthly installments according to interest rates for each year, while most available calculators apply the first year rate to all subsequent years. This is designed to cater to the unique structure of home loans provided by banks in Singapore. The calculator then groups the interest payable into 3 groups: year 1 to 3 and 1 to 5. This caters to short, medium and long-term investors. Extracting the most attractive features of each loan package, it then publishes a list of recommended loans based on lowest interest rates and popularity. The Refinance calculator does all of the above in addition to calculating the potential savings accumulated on the monthly installments and interest payable. The What-If home loan calculator is a first of its kind in Singapore, allowing users to do comparative calculations around fluctuating interest rates over the course of a housing loan. What happens when interest rates rise over the next two years? What if benchmark rates such as SIBOR or SOR inflate on the third year? "These are the what-if scenarios buyers and investors often ponder upon. The What-If calculator helps you answer these questions independently and as a result, facilitate your decision on choosing the right home loan," Sean added. About FindaHomeLoan.sg FindaHomeLoan.sg, a leading home loan comparison portal in Singapore, provides a one-stop resource for homeowners who are looking for the best property loans. FindaHomeLoan.sg focuses on residential, commercial, industrial and overseas properties, and offers superior independent and free mortgage advisory and brokerage services in Singapore.

Refinance Savings Calculator Guide Available On LoanLove.com

SAN DIEGO, June 26, 2013 /PRNewswire-iReach/ -- LoanLove.com has a mission to help consumers and borrowers alike in obtaining the latest information on mortgage lending trends, the real-estate market and the U.S. financial landscape for the purpose of helping them obtain a home loan they love. The team at LoanLove.com is devoted to help empower both first time and experienced homeowners with valuable resources, first-class knowledge and connections to top-rated industry professionals. To fulfill this goal LoanLove.com is continually updating their website with new articles and guides. A recently posted article on LoanLove.com explains how borrowers can use a refinance savings calculator to see which refinance option offers the most favorable terms over time. The article explains: "Easy to use and faithful to the end, a loan calculator is all about YOU and your unique needs. OK, OK, so getting that excited by a mortgage calculator may seem like an excursion deep into Nerdville, but listen up: Loan calculators really are incredibly useful and they can help you "try on" different loan situations so you can get a real idea of what your best options are likely to be, based on your budget and income. They really are easy to use, too: You only need minimal data to use these calculators – typically the amount you want to borrow, the loan term and the interest rate; if you have an idea of how much property taxes you'd likely pay or a rough idea of home insurance costs, so much the better. Punch in the data and the calculator will reward you with your monthly projected costs and can even provide you with a complete amortization schedule – that's mortgage-speak for a chart that shows you what your mortgage balance would be as you make payments over the life of your loan or, in the case of an ARM, until the initial adjustment occurs." These loan amortization calculators can show those who want to refinance just how much they would be saving with each refinance option. This is great news for many homeowners, especially now with the continued low interest rates homeowner in the United States are currently enjoying. But while interest rates remain low (in large part due to Government programs aimed at helping the economy recover from the financial crisis) these low rates will slowly begin to rise. Thus those who wish to refinance their homes will find no time like the present to do so. Loan calculators are simply an easy way for homeowners to find out which refinance structure would be best for their situation and needs and how much they could save by refinancing to a lower rate and/or shorter loan term. Overall, these loan calculators can be a big help for homeowners seeking to refinance. However, as the article points out, there really is no substitute for advice from an actual mortgage professional. Calculators are great for giving borrowers a rough idea of specific scenarios, however to get a more accurate picture of  all options, they would need to speak with an experienced mortgage professional who can perform a more detailed review of their circumstances and make sure they get the best deal possible. For more information on refinance savings calculators, please visit LoanLove.com for the full article. Media Contact: Kevin Blue, LoanLove.com, 949-292-8401, contact@loanlove.com News distributed by PR Newswire iReach: https://ireach.prnewswire.com

Interest Only Loan Calculator Facts Available In New LoanLove.com Guide

LoanLove.com has a mission to help consumers and borrowers alike in obtaining the latest information on mortgage lending trends, the real-estate market and the U.S. financial landscape for the purpose of helping them obtain a home loan they love. The team at LoanLove.com is devoted to help empower both first time and experienced homeowners with valuable resources, first-class knowledge and connections to top-rated industry professionals. To fulfill this goal LoanLove.com is continually updating their website with new articles and guides. A recently posted article on LoanLove.com reviews the many types of loan calculators, including the interest only loan calculator, and how they can benefit those who are looking for the best home loan or refinance rates. The Loan Love article says: "Loan calculators really are incredibly useful and they can help you "try on" different loan situations so you can get a real idea of what your best options are likely to be, based on your budget and income. They really are easy to use, too: You only need minimal data to use these calculators – typically the amount you want to borrow, the loan term and the interest rate; if you have an idea of how much property taxes you'd likely pay or a rough idea of home insurance costs, so much the better. Punch in the data and the calculator will reward you with your monthly projected costs and can even provide you with a complete amortization schedule – that's mortgage-speak for a chart that shows you what your mortgage balance would be as you make payments over the life of your loan or, in the case of an ARM, until the initial adjustment occurs." These simple loan calculators can also help calculate interest only loans. These are types of loans where the borrower only pays the interest on the principal balance for a set amount of time. At the end of this term, the borrower can choose to pay the principal or convert to an amortized loan. This option is good for those who want to benefit from low starting costs but who also know that they will be able to afford higher payments in the future or have even saved up enough to pay the principle balance altogether. Of course there are pros and cons to this or any other type of loan structure, so while using a mortgage calculator is a great way to "feel out" a loan option, the final step will always be to talk to a trained mortgage professional to figure out the best mortgage scenario for any borrower's budget and goals. The Loan Love article says, "Calculators can only tell you so much; while they're great for giving you a rough idea of specific scenarios, they're certainly no substitute for a real, live person. To get a more accurate picture of all your options, you need to speak with an experienced mortgage professional who can perform a more detailed review of your circumstances and make sure you get the best deal possible." For more information on loan calculators and how to find the best mortgage rates, please visit LoanLove.com for the full article.

Student loan rates just doubled -- what now?

BRIAN SNYDER / Reuters Graduating students arrive for Commencement Exercises at Boston College in Boston, Massachusetts May 20, 2013. Interest rates on some federal student loans – namely the Stafford loan for undergraduate students – doubled Monday to 6.8 percent. College students won't get hammered just yet, however – that happens after they graduate and interest begins to accumulate. Here are points to consider about the student loan rate increase as borrowers contemplate whether to take out these loans: What federal student loans are impacted by the doubling of interest rates? Not all federal student loans are impacted. Only rates on new, subsidized federal Stafford loans doubled to 6.8 percent from 3.4 percent on Monday. Students who took out Stafford loans when the rate was 3.4 percent don't need to worry if they locked it in – those will not increase. Rates on existing unsubsidized Stafford loans will remain at 6.8 percent. Rates on federal PLUS loans (taken out by graduate students and parents of dependent undergrads) will remain at 7.9 percent. (Read More: Student Debt Stalemate Will Hammer Undergrads) Will this double my monthly loan payments? The doubling of the interest rate may sound dramatic, but it does not double the loan payments. Most of the loan payment goes to pay down the principal balance of the loan. On a 10-year repayment term, the monthly payment will increase by about one-sixth, says Mark Kantrowitz, publisher of Edvisors.com, a network of college financial planning and scholarship websites. For example, if a student takes out $11,000 in Stafford loans at 6.8 percent, that student would pay $126.59 a month for 10 years to pay off those loans. In contrast, student who had taken out the same amount at 3.4 percent would pay $108.26 a month for 10 years. That may not seem like a big difference but it adds up: $2,200 more over that decade. (Read More: Senator Gives an 'F' to Student Loan Rate Jump) What does this doubling in student loan rates mean for the average borrower? About two-fifths of undergraduate students graduate with subsidized Stafford loan debt. The average amount of subsidized Stafford loan debt at graduation is about $9,000 (or $11,000 for those who receive a Bachelor's degree). Kantrowitz is also the founder of Finaid.org, which has a handy loan repayment calculator. Do I have to make these increased payments immediately? The rate increase affects students after they leave school as no interest is charged on subsidized loans until after a student graduates. (Graduates have a six month grace period before they have to start repaying their loans.) Could rates come down if Congress decides to act later this summer? Certainly Congress could make a change to lower interest rates and make it retroactive to July 1. But a retroactive change would only apply to those loans that have not yet been disbursed by the U.S. Department of Education. (Read More: Introducing the Finance Whizzes of Tomorrow) Last year Congress passed two laws to implement a one-year extension to the 3.4 percent interest rate. The first law authorized the Education Department to delay disbursements on subsidized Stafford loans to July 6, 2012. The second law, enacted on July 6, implemented the extension to the 3.4 percent interest rate. But policymakers are still far apart on key issues, such as whether there should be a cap on the interest rates. A retroactive change in rates may be unlikely. —By CNBC's Sharon Epperson. Follow her on Twitter @sharon_epperson

Mortgage Advice Given In New Loan Love Article Category

SAN DIEGO, July 11, 2013 /PRNewswire-iReach/ -- LoanLove.com, a website with the mission of helping consumers and borrowers to obtain the latest information on mortgage lending trends, the real estate market and U.S. financial landscape in order to help them obtain a home loan that they will love, helps their readers to understand the pros and cons of various loan options in the new Mortgage Advice portal available on the website. The team at LoanLove.com is devoted to help empower both first time and experienced homeowners with valuable resources, first-class knowledge and connections to top-rated industry professionals. To fulfill this goal LoanLove.com is continually updating their website with new articles and guides. The new article category will help visitors to the website locate the best borrower advice quickly and easily. This new category hosts a number of articles, consumers' guides and reviews. There are many topics covered that can help homeowners to make the best decisions when it comes to their home loans so that they can save the most amount of time, money and hassle. These articles are offered in easy to understand language that even the most inexperienced new home buyer will be able to learn from, and yet they do not skimp on any of the important details and even veteran home owners will find information that they can glean and use to their advantage. Featured articles include advice on mortgage rate locks, how to choose the right size loan, and the pros and cons of fixed rate vs. adjusted rate mortgages. The article on mortgage rate locks says: "If you've been mortgage shopping, you've probably seen a lot of interest rates – some lower than others. You've probably also been following news reports about the recent increase in rates, and even though rates are still near record lows, it's pretty obvious that now is the time to take out a new mortgage or refinance an existing one. Of course, once you do decide to apply for a mortgage, it takes time – usually a few weeks – before the mortgage will be finalized. At the end of that time, you want to be sure you end up getting the same low rate that was in effect when you submitted your application. The way to do that is by locking in your rate, and maybe even your points." The article that talks about how to determine how large a loan a borrower would qualify says: "Before you start shopping around for a home, it's a good idea to know what your price range is going to be. A lot of future homeowners find themselves asking the same question, "What size loan can I qualify for?" For a lot of would-be homeowners, the day their mortgage broker calls and tells them the amount they're prequalified for isn't always a unicorns-and-rainbows kinda moment; often the amount you can qualify for may not always align with what you feel you can – or want to – spend. To avoid that crestfallen feeling of disappointment, you might want to turn to that handy-dandy friend of all potential homebuyers: the loan prequalification calculator." The article on fixed rate vs. ARMs starts off by saying: "Lenders create mortgages with two major types of interest rates: fixed and adjustable. As the name suggests, a fixed rate mortgage has an interest rate that does not change. The buyer locks it in at the beginning of the mortgage and pays that same interest rate for as long as he keeps the mortgage. In contrast, most adjustable rate mortgages are set up with a fixed rate for the first five years, plus the potential for an annual adjustment every year after that for the duration of the mortgage. This is often called a 5/1 ARM. Each type of mortgage has its advantages, but most buyers come out with a clear choice in favor of one type or the other." To read these or any of the other articles offering home loan advice, please visit LoanLove.com. Media Contact: Kevin Blue, LoanLove.com, 949-292-8401, contact@loanlove.com News distributed by PR Newswire iReach: https://ireach.prnewswire.com