Loans are sums of money that we receive from a person. The person who gives the money is called a lender and the person who receives the money is called the borrower. You can obtain loan from a person, a bank, a company. In case of a loan obtained from a person the situation is clear, you ask for the money, he offers you money, you have an agreement regarding the sum of money, the date when you have to give the money back, even some warranty. In the case of bank the situation is more difficult, because you have to fulfill some requests of the bank, for that you have to complete some papers that show your financial situation, such as your monthly salary, your financial history, other debts and loans. These papers are then analyzed by the bank and this could take up more days. Once you obtain the loan you must fulfill other official papers, you have to sign a contact through which you offer a written warranty that you will give back the money and the rate of interest is very high. You could obtain a loan from a company if you are in the boarding comity of that company, it is very hard to obtain it and it has lots of jeopardy.

Online loans are much easier to obtain than all the other loans mentioned above and this is why they are becoming so popular. You need only a computer and Internet and the financial problem, debts, debt problems can be solved easy. You can obtain all kind of loans that way, you can be help with debt and loans for an upcoming event, to solve some damages that occurred in your household, loans for holidays, loans for bills, debt loans and short term loans. Online loans can be obtained signing up for it on the Internet, you must fulfill a form and in a few days you will get the money. You can obtain different sums of money, depending on the type of loan, your income, the period of lending and many others. The sums offered start at 500 dollars and can go up to 50,000 dollars. You can give back the money easily even by sending to the company a fixed sum every month or the company will take the money every month from your credit card or from the salary card or you can give back the whole acquired money sum at once.

Have you heard about FICO scores ? that is the score to make the lenders make decision, however this formula was not implemented for sometime because those who made this FICO scores, Fair Isaac and the 3 credit reporting agent were disagreed with the new formula that was issued in 2009. However there is another company called TransUnion tried to use this formula in the beginning of the year 2009 and the other one called Equifax follow after. Some of other companies such as Experian also follow in the next few months afterwards.

However many people were still asking the question on how effective this formula is and how useful it is for you ?

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Mathematic, accounting and other subject related with number and calculation was not really my favorite one. I was lucky if I could just get C for those subjects when I was still in school. Unfortunately after I have grown, I still can not avoid those numbers thing from daily life, starting from I wake up in the morning, I already have to start to calculate my expenses today. When first time I got a job and first time I receive my salary, that number was following me from day to day. Even though I am working as secretary and not necessarily related with accounting but still, I need to Calculate my boss’ expenses, calculate my boss exchange rate, calculating my daily expenses, my monthly need, my family needs, my saving, my installment, my debt and now.. my mortgage loans! Oh my God, I feel like to give up with these annoying numbers.

Some people may use calculator or Excel or special formula to work with this repayment.. Comparing the costs from some mortgages and to re-consider my affordability is the one that needs to do for calculating this mortgage loans. This calculation is also useful for calculating the personal loans, second mortgages, re-mortgages, and commercial mortgages.

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As you might have known, President Obama wants the direct student loan program to be established as the one and only provider of federal student loans. It seems that the Federal Family Education Loan Program has the same opinion with Obama and the support have been raised.

According to a report from USA Today, the popularity of the Direct Loan Program have increased significantly, it can be seen from the 50% increased number of college and universities that are originating loans through the Direct Loan Program.

Moreover, there are 1,600 schools that are offering direct loans, up from 548 schools in 2007, according to the Department of Education, while the number of schools offering FFELP loans fell by 3.6 percent during the same time period.

Currently, students are able to get federal student loans from one of two government programs: the Federal Family Education Loan Program, through which students borrow money from private third- party lenders that are subsidized by the government, or the Direct Loan Program, through which families borrow money directly from the Department of Education.

Direct Loan Program: The Future of Federal Student Loans

However, President Obama recently announced a plan that would eliminate the proven 44-year-old FFEL program, which is responsible for making three out of every four federal student loans. The move would transform the Direct Loan Program from a minority player in the student loan industry to the nation’s only originator of federal student loans.

The president’s plan could reduce the government’s student loan costs and save the government $4 billion, Obama administration officials suggest.

Critics of the president’s proposal — which include private student loan lenders — contest the government’s $4 billion savings estimate and fear that the Department of Education won’t be able to handle the surge in loan volume that would occur if the Direct Lending Program became the only originator of federal student loans. Families could be forced to endure poor customer service from an overburdened system, and could encounter difficulties in getting the funds they need for school, critics say.

Besides excellent customer service and a long-running track record of success, private lenders have another advantage over direct lending, says Barry Feierstein, executive vice president of Sallie Mae.

“Private lender and loan guarantors have a system to help borrowers avoid defaulting on their loans,” he says. “That level of outreach doesn’t exist in the federal direct loan program.”

So what do you think about the new financial aid scheme for students?

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