College Student Loan Consolidation
Education is expensive. Students need lots of money to pursue their education. That is where student loans come in. Student loans are indeed a good financial aid source for those in need to pay for their education. Many students leave college with heavy debt due to having multiple loans from many lenders. That means they must write many loan repayment checks every month, which is troublesome. Loan consolidation is just what these students need to solve that problem.
Loan consolidation is similar to a home mortgage refinancing. What loan consolidation does for you as a student is combining all your student loans into a single loan with one lender and one repayment plan. In other words the balances of your existing student loans are paid off, with the total balance rolling over into one consolidated loan. You then end up with having only one student loan to pay each month.
Loan consolidation has the following benefits :
*Locks in a fixed, usually lower, interest rate with longer repayment time.
*Lowers your monthly payment.
*Combines all your student loan payments into one monthly payment.
*Has flexible repayment options with no fees, charges or prepayment penalties.
*Requires no credit checks or co-signers.
You need to consolidate your loans if the consolidation loan has a lower interest rate than your current loans, especially if you are struggling hard to make your current monthly payments.
You don't need to consolidate your loans if the consolidation loan has a higher interest rate than your current loans or you almost finish paying off your existing loans. In the latter case loan consolidation may not be worth it.
Consolidated loan interest rate is calculated by averaging the interest rate of all the loans being consolidated and then rounding up to the next one-eighth of one percent. The maximum interest rate is 8.25 percent. In fact you can just visit loanconsolidation.ed.gov for an online calculator that will do the math for you.
How much you can save by consolidating loans will depend upon what interest rate you get and whether or not you extend your repayment plan. According to Sallie Mae, the United States leading student loans provider, consolidating student loans can reduce monthly payments by up to 54 percent. This is true if and only if you extend your repayment plan, it's the trade-off. Typical student loans have 10 years repayment plan, however, depending on the consolidating amount, your repayment plan can be extended all the way up to 30 years. You need to realise that extending your repayment term means longer time to pay off your debt, which in turn means you will pay more in interest. You can of course pay off your loan early when possible with no prepayment penalties.
You need to meet the following criteria to be eligible to consolidate your loans :
*You are in your six-month grace period following graduation or you have started repaying your loans
*You have eligible loans totaling over $7,500
*You have more than one lender
*You have not already consolidated your student loans, or since consolidation you have gone back to school and acquired new student loans
The following types of loans can be consolidated:
*Direct Subsidized and Unsubsidized Loans
*Federal Subsidized and Unsubsidized Federal Stafford Loans
*Direct PLUS Loans and Federal PLUS Loans
*Direct Consolidation Loans and Federal Consolidation Loans
*Guaranteed Student Loans
*Federal Insured Student Loans
*Federal Supplemental Loans for Students
*Auxiliary Loans to Assist Students
*Federal Perkins Loans
*National Direct Student Loans
*National Defense Student Loans
*Health Education Assistance Loans
*Health Professions Student Loans
*Loans for Disadvantaged Students
*Nursing Student Loans
You can consolidate your loans through any bank or credit union that participates in the Federal Family Education Loan Program, or directly from the U.S. Department of Education. They usually offer the same loan consolidation terms and conditions. You may want to check first with the lenders that hold your current loans. If all your loans are with one lender, you must consolidate with that lender.
You can only consolidate your student loans once, unless you go back to school and take out more loans. It is thus important that you make sure that you get the best deal the first time. The interest rate from all lenders wil normally be the same. However some lenders may offer you future rate discounts if you pay promptly and a discount for having your monthly payments debited directly from your account.
You can consolidate your loans any time during your six-month grace period or after you have started repaying your loans. If you consolidate during your grace period, you may be able to get a lower interest rate. However, since you will lose the rest of the grace period, you may want to wait until the fifth month of the grace period before consolidating. The consolidation process usually takes 30-45 days.
You and your spouse can consolidate your loans together, but it is not recommended for a couple reasons:
*If you divorce or separate, both of you will still be held responsible to repay the loan
*If you need to defer your loan payment, both of you will have to meet the deferment criteria
If you are default in making your debt payments, you may still qualify for school loan consolidation. It is important to check with your loan holder, to ensure your defaulted loan has not been subject to wage garnishment. If your defaulted loan is subject to wage garnishment, you may not be able to consolidate.
More information about school loan consolidation can be readily available :
· by requesting it from the financial aid office at school
· by requesting it from the holder of your original debt
· by researching the internet
Any financial aid office can usually provide you with the loan consolidation information you need. Your original debt holder and internet are also good resources for you to check out for even more information.
To get the best loan consolidation, you must:
*Know Your Credit Score
The lender determines what interest rate you deserve by seriously considering your credit score. If your credit rating is over 660, you qualify for the best student loan consolidation rates. If under 600, you may want to find ways to raise it before consolidating your loans. If you have a very poor credit, then you may not even qualify for student loan consolidation. If your credit is good, the lender believes that you are unlikely to be default paying your debt. So the loan interest rate you get is highly correlated with your credit score.
You can get a copy of your credit report by :
· online requests
· written requests
· requesting in person
The more knowledge you have on your credit score, the better chance you will have at getting the best rates from lenders. Internet is a wonderful tool in helping obtain the best loan interest rates and educating yourself on the subject. By utilizing any search engine, you can easily generate huge amounts of information with just a few mouse clicks. There are many online tools to assist you in finding the best available interest rates including :
· free credit check links
· student loan consolidation calculators
· interest rate estimators
Know your credit scores and be well-informed. This way you are more likely to get the best possible interest rate when you consolidate your loans.
Loan consolidation is similar to a home mortgage refinancing. What loan consolidation does for you as a student is combining all your student loans into a single loan with one lender and one repayment plan. In other words the balances of your existing student loans are paid off, with the total balance rolling over into one consolidated loan. You then end up with having only one student loan to pay each month.
Loan consolidation has the following benefits :
*Locks in a fixed, usually lower, interest rate with longer repayment time.
*Lowers your monthly payment.
*Combines all your student loan payments into one monthly payment.
*Has flexible repayment options with no fees, charges or prepayment penalties.
*Requires no credit checks or co-signers.
You need to consolidate your loans if the consolidation loan has a lower interest rate than your current loans, especially if you are struggling hard to make your current monthly payments.
You don't need to consolidate your loans if the consolidation loan has a higher interest rate than your current loans or you almost finish paying off your existing loans. In the latter case loan consolidation may not be worth it.
Consolidated loan interest rate is calculated by averaging the interest rate of all the loans being consolidated and then rounding up to the next one-eighth of one percent. The maximum interest rate is 8.25 percent. In fact you can just visit loanconsolidation.ed.gov for an online calculator that will do the math for you.
How much you can save by consolidating loans will depend upon what interest rate you get and whether or not you extend your repayment plan. According to Sallie Mae, the United States leading student loans provider, consolidating student loans can reduce monthly payments by up to 54 percent. This is true if and only if you extend your repayment plan, it's the trade-off. Typical student loans have 10 years repayment plan, however, depending on the consolidating amount, your repayment plan can be extended all the way up to 30 years. You need to realise that extending your repayment term means longer time to pay off your debt, which in turn means you will pay more in interest. You can of course pay off your loan early when possible with no prepayment penalties.
You need to meet the following criteria to be eligible to consolidate your loans :
*You are in your six-month grace period following graduation or you have started repaying your loans
*You have eligible loans totaling over $7,500
*You have more than one lender
*You have not already consolidated your student loans, or since consolidation you have gone back to school and acquired new student loans
The following types of loans can be consolidated:
*Direct Subsidized and Unsubsidized Loans
*Federal Subsidized and Unsubsidized Federal Stafford Loans
*Direct PLUS Loans and Federal PLUS Loans
*Direct Consolidation Loans and Federal Consolidation Loans
*Guaranteed Student Loans
*Federal Insured Student Loans
*Federal Supplemental Loans for Students
*Auxiliary Loans to Assist Students
*Federal Perkins Loans
*National Direct Student Loans
*National Defense Student Loans
*Health Education Assistance Loans
*Health Professions Student Loans
*Loans for Disadvantaged Students
*Nursing Student Loans
You can consolidate your loans through any bank or credit union that participates in the Federal Family Education Loan Program, or directly from the U.S. Department of Education. They usually offer the same loan consolidation terms and conditions. You may want to check first with the lenders that hold your current loans. If all your loans are with one lender, you must consolidate with that lender.
You can only consolidate your student loans once, unless you go back to school and take out more loans. It is thus important that you make sure that you get the best deal the first time. The interest rate from all lenders wil normally be the same. However some lenders may offer you future rate discounts if you pay promptly and a discount for having your monthly payments debited directly from your account.
You can consolidate your loans any time during your six-month grace period or after you have started repaying your loans. If you consolidate during your grace period, you may be able to get a lower interest rate. However, since you will lose the rest of the grace period, you may want to wait until the fifth month of the grace period before consolidating. The consolidation process usually takes 30-45 days.
You and your spouse can consolidate your loans together, but it is not recommended for a couple reasons:
*If you divorce or separate, both of you will still be held responsible to repay the loan
*If you need to defer your loan payment, both of you will have to meet the deferment criteria
If you are default in making your debt payments, you may still qualify for school loan consolidation. It is important to check with your loan holder, to ensure your defaulted loan has not been subject to wage garnishment. If your defaulted loan is subject to wage garnishment, you may not be able to consolidate.
More information about school loan consolidation can be readily available :
· by requesting it from the financial aid office at school
· by requesting it from the holder of your original debt
· by researching the internet
Any financial aid office can usually provide you with the loan consolidation information you need. Your original debt holder and internet are also good resources for you to check out for even more information.
To get the best loan consolidation, you must:
*Know Your Credit Score
The lender determines what interest rate you deserve by seriously considering your credit score. If your credit rating is over 660, you qualify for the best student loan consolidation rates. If under 600, you may want to find ways to raise it before consolidating your loans. If you have a very poor credit, then you may not even qualify for student loan consolidation. If your credit is good, the lender believes that you are unlikely to be default paying your debt. So the loan interest rate you get is highly correlated with your credit score.
You can get a copy of your credit report by :
· online requests
· written requests
· requesting in person
The more knowledge you have on your credit score, the better chance you will have at getting the best rates from lenders. Internet is a wonderful tool in helping obtain the best loan interest rates and educating yourself on the subject. By utilizing any search engine, you can easily generate huge amounts of information with just a few mouse clicks. There are many online tools to assist you in finding the best available interest rates including :
· free credit check links
· student loan consolidation calculators
· interest rate estimators
Know your credit scores and be well-informed. This way you are more likely to get the best possible interest rate when you consolidate your loans.
posted by Suzie | 4:16 AM
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