Top 3 Student Loan Consolidation Money Saving Tips

1. Shop around. Loan consolidation program reductions vary from lender to lender, the more interest rate reduction the better.
2. Pay off your loan as early as possible
3. If you have variable rate Stafford loans consolidate no later than 6 months after you graduate.

To save money with a student loan consolidation you need to take three things into consideration, your interest rate, how long it will take you to pay back your loan, and the status and type of your student loans.

Tip 1-Shop Around

First let’s talk about the interest rate. The lower your interest rate the less you will pay on your student loan consolidation. As I told you earlier the interest rate on a consolidation loan will be fixed. Once it is fixed it can not go higher, but it can go lower. Many student loan consolidation programs offer benefits to lower your interest rate. The main two benefits offered by student loan consolidation programs are for consecutive on-time payment and direct withdrawal. The on-time payment benefit is simple. If you make your payments on-time for a set amount of months your interest rate will automatically drop. Here’s an example: Let’s say you have a consolidation loan with lender “A” and an interest rate of 5%. Lender “A” will give you an interest rate reduction of 1.25% for consecutively making your payments on-time for 24 months. This means that after 24 months of making your payment on-time the interest rate will drop 1.25% creating a new interest rate of 3.75%, a huge money saver over the long-haul.

The second benefit, direct withdrawal is even easier. Set up a monthly automatic direct withdrawal from your bank account and receive an interest rate reduction. The interest rate reduction will generally be anywhere from 0.25% to 0.5%. Automatically, each month the loan consolidation program will take your monthly payment out of your bank account. In return, the lender will drop your interest rate.
Tip 2-Pay off Your Student Loans as Early as Possible

The 2nd tip is pay-back your student loans as soon as possible. The less time it takes to pay back your loan the more money you will save. If possible, I suggest paying more than your monthly dues. Here’s an example, let’s say you have picked a student loan consolidation program and you have $60,000 in student loans with an interest rate of 5.5%. Your new student loan consolidation program gives you the option of a 30 year repayment term or 10 year repayment term. Which option will you pick? Well the choice is up to you, but let me break it down. If you pay off your loan in 10 years you will end up paying roughly $90,000. If you pay off your loan in 30 years you will end up paying roughly $120,000, a difference of roughly $30,000. If you went with the option to pay off your loan in 10 years it will end up saving you a lot of money.
Tip 3-Consolidate Your Variable Rate Stafford Loans

The 3rd tip is to consolidate your variable rate Stafford Loans no later than 6 months after you graduate? If you have variable rate Stafford loans the interest rate will rise 0.6% 6 months after your graduate. You can find out the status and type of your loan by calling your financial aide department at your college.

Business Startup – 3 Critical Business Financing Mistakes to Avoid

If you were to start committing any of the following 3 business financing mistakes too often, you would greatly reduce your chances of long-term business success. And to be a success in business you have to think long-term. Track record and reputation in business is earned over time. A good business track-record is largely judged on financial success and financial success in business is assessed largely through the examination of business accounts. Good business accounts demonstrate to banks, financiers, colleagues etc., that you are a bankable business person and will lead them to put their faith and money into you and your business ventures.

By not committing any of the following 3 business finance mistakes you will, at the very least, have good financial indicators and be able to respond to the businesses financial position in time. The key here is to understand both the causes and significance of each.

Business Financing Mistake # 1 – No Monthly Bookkeeping.

Regardless of the size of your business, inaccurate record keeping creates all sorts of issues relating to cash flow, planning, and business decision making. In a word, your business is doomed if you are not doing monthly bookkeeping.

Bookkeeping services are dirt cheap compared to most other costs a business will incur. Bookkeeping should be done on a monthly basis along with Management Accounts so that your financial records are always up to date and you can view the financial status of the business (Profit and Loss, Balance Sheet etc.) Once a bookkeeping process gets established, the cost and time involved usually goes down. By itself, this one mistake tends to lead to all the others in one way or another and should be avoided at all costs.

Business Financing Mistakes # 2 – No Projected Cash Flow & Budget

Having no meaningful bookkeeping creates a lack of knowledge on where you are. And having no projected cash flow and budget creates a lack of knowledge about where you’re going. Without keeping score, a business tends to stray further and further away from its targets and, invites a crisis that eventually forces the business to change it monthly spending and cash-management habits. A projected cash flow first and foremost needs to be realistic. You should project both a best-case and worst-case scenario based on projected sales and business expenditures. It’s a good idea to aim for the best-case scenario but know how the business would respond should the worst-case scenario transpire.

Business Financing Mistakes # 3 – Inadequate Credit Control

There’s nothing worse than making sales, doing the work, sending your customer an invoice and then not getting paid on time…or worse still not getting paid at all! It’s a well-established fact that the longer a debt isn’t collected the less chance it will be collected. Typical credit terms in most established business are 30 days. However, due to a culture amongst some customers of paying late and small business not operating strict credit control, a business can often not get paid on time and fast run out of cash. So how do you avoid this? Well, there are numerous steps you can take but the following 3 steps will help ensure you always get paid…and paid on time.