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Applying for A student Loan Made Easier – Marrick Finance

In the modern economic environment, the cost of college tuition has risen dramatically, but it is not all bad news. As the cost of school goes higher, the access to student loans and funds for college is on the rise as well.

There are very many diverse student loan programs such as:

College scholarships
Grants
Federal student loans
Stafford loans and more

If you were looking for financial aid for your education, you have many options. Furthermore, since the slowing economy has also put many people in a bad credit situation, there are options such as Marrick Finance’s no-credit student loans which are designed for students with poor or no credit.

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Student Loans vs. Student Line of Credit

You have surely heard about student loans, but have you ever heard about a student line of credit? What is the difference? Who is eligible? When do you have to pay it back? If you find yourself asking questions like this, then do not sweat it. We took all the notes so that you can focus on what is important for now – your studies.Telling the difference between a student loan and a personal line of credit can be difficult. The main difference lies in:

• How the eligibility process works
• How interest is paid
• And when you have to pay back the full amount

Let us take a closer look:

Eligibility

When it comes to student loans, most lenders give priority to students whose parents have lower-than-average income. In other words, you are more likely to get a larger loan amount based on your financial needs. The more you can afford to pay for your schooling, the less loan amount you will be able to receive.

The Line of Credit amount that the student receives depends on how much money they apply for. In most scenarios, students who apply for a student line of credit do so as a secondary form of student borrowing or emergency fund. Many times, a federal or student loan or other forms of grants and financing only cover tuition fees. A student line of credit helps students afford the costs associated with living in school such as rent, bills, transport, clothes, food, just to mention a few.

Interest

Interest it the amount of money you pay on top of the amount of money you actually received. On most student loans, you do not have to pay interest until you are done with your degree or diploma.

With a student line of credit, interest is applied immediately and the student or cosigner has to pay -relatively small – interest payments, normally on a monthly basis as they are attending school.

Repayment

Now this is where things get real – paying back your loan. Both student loans and student lines of credit offer a grace period before you can start repaying.

With a Marrick Finance student loan, students have a grace period of **** months after receiving their degree or diploma before they can start repaying the loan.

For students line of credit, you may get a grace period of 6 to 12 months before you are required to start making monthly, interest-only payments. However, after you graduate, you will be required to pay the whole amount within a given timeframe plus interest. As a result, student lines of credit are more flexible compared to student loans.

Things You Should Know About A Marrick Finance Student Line of Credit

Payments Amount available Costs Making a Draw Daily Average Principal Balance Outstanding Principal Balance

Before your payment is due, you will receive a Periodic Statement, which will contain details such as the activity on your account during that billing cycle and the Minimum Payment to be made.

The minimum payment consists of your Billing Cycle Charge and Mandatory Principal Contribution to pay off your Outstanding Principal Balance. Reducing this balance increase the amount of credit that you can access.

Your account status is reported to TransUnion and you can use this opportunity to build a solid credit.

If approved, your credit limit will range from between $500 and **** depending on various criteria.

You begin to incur charges once money is disbursed into your account. The Billing Cycle Charge is calculated depending on the amount of money you borrow and not based on your credit limit.

Your money will be at your fingertips. Just log in to your account (#) and request for a draw. You have the freedom to request the credit available to you all at once, or you can draw in smaller amounts over time. Any requested funds will be deposited into your bank account on the same or following business day.

This is the average amount of money you have borrowed on your Line of Credit during a specific billing cycle. It does not include any charges you may owe.

This is the amount of money you have borrowed on your Student Line of Credit but have not yet paid off.

Do you have more questions? Please head to our FAQs.

Picking Between A Variable and Fixed Rate Student Loan

So, you have filled out the student loan application, gotten approved (congratulations!), and now you are faced with two options for your loan: fixed or variable interest loans?

In this section, we are going to see some factors worth considering before you decide whether to settle on a fixed or variable rates student loan:

Fixed-Rate Student Loans

Fixed-rate student loans have a consistent interest throughout the loan term. In other words, the interest rate on the loan when you first borrowed it will be the same rate you pay at the end of the repayment period.

In general, fixed-rate student loans are considered a safer option since there is no chance the interest rate will increase over the life of the loan.

They are not influenced by changes in interest rate in the market
The monthly payments stay consistent throughout the loan term, unless the borrower wishes to pay more.

Fixed-rate student loans normally have a higher starting interest rate compared to variable loans. As a result, you could miss out on the initial savings in case the variable interest rate starts lower than the fixed one.

Note that all federal student loans have a fixed interest rate. You can only access loans with a variable interest rate from private lenders such as Marrick Finance.

As the name suggests, variable rate student loans have a changing interest rate, and what you pay at the start of the loan is not necessarily what you will pay by the end of the term. The rate of interest on these loans is influenced by market conditions and can either increase or decrease. As a result, they are considered a riskier loan option compared to fixed rate loans.

Most lenders peg their interest rates to interest rate indices such as London Interbank Offered Rate (LIBOR). So, when the interest rate of your loan is pegged to LIBOR and the LIBOR rates go up, the interest on your loan will also rise and vice versa.

Before going for a loan with variable interest rates, it is a good idea to ask your lender how often the rates will change over the course of the loan. You should also ask whether there is a cap on the rate. Some lenders will put a cap such that a variable-rate will never go up past a certain amount.

Typically start with a lower interest rate than fixed rate loans
A good option for those seeking low-interest rates and ready to pay off their student loans quickly
Borrowers stand a chance to save money if the interest rates drop in future

The monthly payments do not stay consistent and may go up or down according to market performance
For those paying their loans over a long period of time, there are higher chances that the interest rate may increase, pushing up the cost of the loan.

How to choose a student loan that works for you: variable or fixed

The final decision you make about your student loan will mostly depend on your situation. If you are looking to pay off your student loan quickly, then one with a variable interest rate may be the cheap option because of the lower interest rates.

Nonetheless, beware that the longer it takes for you to pay back the loan, the greater the chances for the interest rates to rise. You can help mitigate your risks by going with a lender with a cap on the variable rates such as Marrick Finance, but there will still be fluctuations.

Conclusion

When thinking about the difference about fixed and variable rate student loans, it helps that the name is very descriptive.

A fixed rate loan stays the same for the entire course of the loan. A variable interest loan may fluctuate with market changes over time. Furthermore, all federal student loans have fixed interest rates that are set and reviewed annually by Congress.

Want to learn more about student loans? Check out our FAQs and more resources in our Learning Center that will help you better understand student loans.

Apply for a Marrick Finance Student Loan Today

Student loans can get complex, but Marrick Finance is here to help. We are with you every step of the way, from helping you finance your tuition to help you manage existing student debt.