Defined below are the three different categories of instant loans:

1. Instant personal loans: these loans are usually provided by an online lender. You just have to go online and search for a lender who will provide these services for you. The requirements for applying for this kind of loan are not very stringent either. All what you need is a checking account and a verification of your employment, citizenship and no more than two outstanding loans. There are no credit checks or co-signers to the loan. However, you must not have a bankruptcy condition or a credit failure to your current record or else you will not be able to apply to this kind of loan.

1. Payday loans: these loans are instant loans and are quite similar to instant personal loans. These payday loans offer loans amounting ranging from $500 to $1500 and its repayment period ranges from 14 to 30 days. These loans do not require any collateral or any other binding from you. Your checking account and your proper employment will only be required for them to be ensured that you can pay back the loan as soon as you receive your next paycheck. Unlike instant personal loans, you can only apply for this loan if you also have any outstanding loan even with a bad credit score to your past record. Payday loans also require the borrower to pay a certain lending fee to the lender to obtain the loan. These loans are just a little different from Instant loans since the mode of application and credit requirement differ.

1. Student loans: these are very flexible kind of loans especially designed to facilitate students and their college fees. These loans have the easiest repayment terms and can be acquired immediately at the request of the students. It is mostly the college itself that provides these services to students upon presenting certain documents for verification. The best thing about these loans is that they are interest free and the student can easily pay the debt off in a long repayment term after graduation from the college or university.

It is a shame that many young people who are making plans for college do not look at financing their college education realistically. They think that if they complete the education they are seeking they will simply get a high paying job and pay off their student loans and everything will work out just fine.

That is not what happens in many cases. Not long ago I read about a young woman who recently finished school and had a great job as a television journalist, but she was inundated by her student loan debt. She had taken out four student loans of which three were private loans. She graduated from a private college in New York and had $115000 worth of student debt whe she finished school. She was paying $1200 monthly on her student loans, and her pay was not nearly high enough to cover that amount of student loan debt each month. She tried to get a loan consolidation on her private student loans, but the lender refused her request citing tight credit market conditions. So for the time being she is stuck and just has to try and struggle through her financial problems. She apparantly was offered the option to pay only the interest on the loans, but that was not appealing because the payments would have been about $500 and she would be making no progress in getting the loan balances paid off. Fortunately for her she does have a good job, and hopefully she will retain that because if she doesn’t she’ll have really big problems.

Her first mistake was a common one. She simply went too deep into debt. Student loan borrowers are advised to listen to the following advice and thus avoid the pain and suffering that goes with defaulting on student loans. Only borrow up to what your yearly beginning salary is expected to be. With federal student loans this young woman would have had the right to consolidate her loans, but her private loans left her at the mercy of the lender. She could look into getting a deferment of her private loans to buy some time, but she needs to be careful because she might end up with higher interest rates after she has a deferment. Not long ago I read about a young man who defered hid his private student loans for six months and was surprised to learn his interest rate jumped from 13% to 18%. Borrowers must be very careful and comprehend fully what it is they are agreeing to. It would be wise to have a parent or someone else who cares about you go over the papers with you. If you end up carrying loans at 18% interest rate, like the borrower mentioned above, you are in deep trouble. And be aware that there is no way of getting out of a trap like that because even if bankruptcy is declared, student loan debt is not dismissed.

A student borrower also needs to realize that his loan payback needs to be about 10% of gross pay. Beyond that amount you will probably find yourself overextended and struggling financilly.

Some student borrowers are attracted to private student loans because of the relative ease of signing up for the loans, as opposed to the difficult and sometimes perplexing FAFSA form that must be filled out for federal loans. It is worth the trouble to get through the FAFSA form process, however, because federal student loans will always be substantially better for the borrower than private student loans. Be very wary of the latter. As stated above, don’t borrow more than your expected starting salary, and be careful your monthly payments won’t exceed 10% of your gross salary. And make sure you avoid defaulting on either federal or private student loans. Learn much more about managing student loan debt at Student Debt Consolidation

As for private student loans, if you do manage to obtain a loan consolidation you are simply trading one or more private loans for another one.. You cannot just assume that you will be able to get a loan consolidation if you have several private student loans.. The private lender is definitely under zero statutory requirement to do so, and these people may well simply refuse to consolidate your college loans or perhaps point out they are not able to do so since financial markets are restricted, for instance. And if you do manage to get a private student loan consolidation pay particular attention to the rate of interest you must pay on the consolidated loan. It is entirely possible the lender has inserted a higher interest payment compared to what you had before. And remember one cannot consolidate private and federal loans together. It would be wise to avoid private student loans if possible.

Federal higher education loans are always better for the borrower than private college loans. For federal loan consolidations there is a maximum rate of interest that can be charged to the borrower, and this is determined from the interest rates being paid on the separate loans. In addition the borrower possesses a number of rights with consolidated federal school loans, for example the right to defer the college loan in specific circumstances and the right to forbearance. The borrower can also change his payback plan as needed and set up a repayment schedule based on actual income. Consequently if you go through a few hard economic times because of losing a job or becoming sick, for instance, it is possible to change your payment plan to one based on earnings and come up with a reduced monthly installment. Naturally this means that it will take longer to pay down the school loan, and the total amount of interest to be paid out will be increased in the end as well. However if this helps the borrower avoid loan default the longer payback time will be worth it. It cannot be overemphasized that defaulting on school loans is the last thing an individual wants to have happen. There are big penalties and collection costs, not to mention accrued interest. Quite a few consumers who have defaulted on higher education loans are shocked to find out they currently owe 3 or even 4 times the sum of the initial loan.

When thinking about a student consolidation, there are 2 crucial recommendations that if acted upon will most likely enable a borrower to avert default and the enormous amounts of problems that go along with it. Namely, an individual must not borrow more than his or her starting salary is expected to be. On top of that the borrower’s monthly loan payments shouldn’t be greater than 10% of monthly gross salary. Having student debt beyond that is likely to make the borrower feel over extended. Learn more at Student Debt Consolidation as well as Student Consolidation.

People need to understand as well that once a federal student loan consolidation has been done it cannot be done a second time. Consequently the borrower is stuck with the loan, the interest rate, and the lender for the entire period of the loan. And bear in mind that college loan debt cannot be dismissed in a personal bankruptcy court proceeding.

Let’s discuss the repayment plans available for federal student loans.

Standard Repayment Plan

If you can afford this plan, it is the best option to get your loan paid off as quickly as possible and with the lowest amount of interest. The standard plan is normally set up for 10 years or less and will offer the best interest rate of any plan. $50 is the smallest monthly payment possible. For those finding a good paying job right out of college, this is the best option. 10-15% of monthly income is a reasonable amount for monthly payments. You are most likely in financial difficulty if your monthly payments are 20% of gross income or higher.

Extended Repayment Plan

This option extends your payments out over a longer period giving you lower monthly payments than the standard. This translates into paying more for your education because you will be paying more interest on the loan. This plan can pay off your loan from between 12 and 30 years, depending on the size of the loan. This repayment plan is only applicable for loans over $30,000 and does not apply for FFEL loans from prior to Oct 7, 1998.

The Graduated Payment Plan

This plan fits people who will start out their working life with a relatively low starting salary with the expectation of getting good salary increases in the future. Payments are increased every two years after starting the loan repayment with low monthly amounts. Payments can be as low as $25 per month, but the payment must cover the interest being earned by the lender on the loan. There are also other restrictions. The payment cannot be less than half of the standard plan and not be greater than 150% of the standard plan.

Income Based Repayment Plans

Several options exist to set up monthly payments based on the amount of income you earn. You need to keep accurate records of income and tax information because these plans are recalculated each year.

The idea behind these repayment plans was to encourage people to work in lower paying public service types of jobs. In fact the Income Based Repayment Plan (IBR Plan) will forgive the debt that remains after 10 consecutive years of being employed in public service. This can obviously be a huge benefit.

Other plans include the Income Contingent Repayment Plan (ICR Plan) for Direct loans and the Income-Sensitive Repayment Plan (ICS Plan) for loans serviced by FFEL lenders. For people on low incomes or incomes that fluctuate, these repayment plans offer the ability to have an affordable debt load. The ICS and ICR plans have provisions such that the loan balance can be written off in 25 years, but that amount is counted as taxable income in the year the loan was dismissed.

The goal of these repayment plans for a consolidated federal stuent loan is to permit borrowers to come up with monthy payments they can afford. The plans are very flexible and allow for the borrower to change repayment plan fairly often if necessary. Despite this a lot of people owing student loans manage to default causing enormous problems for themselves with their credit ratings which takes them years to repair. In other words they don’t listen to advice given them by parents, councilors and others, and they just have to learn the hard way. Borrowers need to know their options with respect to a federal student loan consolidation, to keep their payments current and to make every attempt to get out from under their student loans and get on with the rest of their lives..

One last comment for those wondering: you cannot get out of a federal or private student loan by declaring bankruptcy. Learn more at Student Loan Consolidation.