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Student Loan Consolidation – Does It Solve All Your Problems?


If you’re struggling with your student debts, you might as well consider a loan consolidation at present. The entire process can simplify your repayment process in a major way as it centralizes your debts and the repayment period can be extended even up to for 30 years.

However, it should be considered that a longer period of repayment would mean that you’re actually paying up more than what you would in case you had opted for a shorter tenure.

Federal Nursing, Direct Subsidized, Direct Plus, Health Education Assistance, Direct Unsubsidized, and Supplemental Student Loans, etc are some of the types of debts that can be consolidated.

It becomes very difficult to keep a tab on each and every debt- how much you owe to each of your creditors. Consolidation, on the other hand, aids you in streamlining several of your repayments by means of combining all of them into a single loan. You can opt for consolidation after you have left school or else after your graduation or when you have dropped below half-time enrollment.

student loan consolidation

A fixed-rate of interest is charged on a consolidation loan. The rate is fixed for the entire tenure and is based on the average weight of all the loans that you need to repay. Though there is no such cap on the rate of interest of Direct Consolidation Loan, the overall interest rate might be something close to one-eighth of 1 percent.

In this regard, it must be mentioned that students often opt for fast cash loans in a bid to pay off their semester fees, rent, or else food bills. You can know more about them at Cash-Loans.eu. But student debt consolidation might not as well aid you in tiding over these financial obligations of yours.

How should you Approach Consolidation?

Now, it is important to avail of a few tips when it comes to consolidation or else streamlining the same. Find out more below:

Sit down and make a list of what you actually owe. It implies the total volume of debts that you have. Besides, it is important to find out the type of debts that you have. The rates of interest would vary with subsidized and unsubsidized Stafford loans.

Those who have a mix of both these debts would experience varying rates of interest. So it is important to check your documents thoroughly and in a bid to do that, get in touch with your lender.

Please make sure that you are comparing the monthly payments that you’re bearing now and what you have to bear in case you opt for debt consolidation. The tenure of repayment should also be considered as a longer-term would mean that you’re actually paying up more.

Student Loan Consolidation Program

As a student, you may have applied for a few student loans in order to pay for your school fees. And after you finish your study and get your degree, you will need to pay back your student loans once you got a job. Different student loans with varied in the rates of interest and also different payment dates every month.

As a result, it may seem challenging for you to deal with your several student education loans and you will have to worry about any missed payment or late payment that can damage your credit score in your credit report.

If you having such a problem, you may consider getting the Student Loan Consolidation Program which is a loan repayment program specially designed for college students and also graduates who have several student loans with them and wish to simplify the process of repayment. But, prior to you to sign for any loan consolidation program, it is important for you to know about some basic information related to loan consolidation.

What Can A Student Loan Consolidation Program Does?

The student loan consolidation program enables you to consolidate all your unpaid student loans into a single loan. For instant, in case you got 3 different government student loans, you are able to combine them together to come just one loan.

Theoretically, these 3 loans shall be regarded as settled completely and a new loan is going to take place. The primary idea is basically that you’re acquiring a new loan to repay all your unpaid student loans; in another way, it means that rather than for you to pay for 3 different student loans separately, once the loan is consolidated, all you need to do is just pay for one single loan with one payment and due date. By doing so, you will find it is now easy for you to manage your student loan.

Two Different Types Of Government Student Consolidation Loans

In general, there are two types of government student loan consolidation schemes available. The first one is known as direct consolidation loans. If you get the direct consolidation loans you will bypassing any bank or lending companies and will make payments directly to the US government Department of Education.

The second one is the Federal Family Education Loans(FFEL) consolidation loan program. This type of loan scheme works on the new loan company between the original lender and the federal government. Loans that contained in this loan scheme including standard student loans, for example, Perkins loans, Stafford Loans, and PLUS loans.

Nevertheless, several states also provide government student loan consolidation programs that are financed from the state treasuries. They have also been reasonably competitive programs with regards to repayment and interest, generally tailor-fitting the plans to distinctive state or university needs.

For states that don’t have state-funded programs like Arizona, Alaska, Kansas, Mississippi, Nevada, Wyoming, Hawaii, Maryland, and Indiana use United Student Aid Funds to be the national guarantor of their government student loan consolidation programs.

Advantages of Direct Consolidation Program

For direct consolidation program, government-subsidized loan interests keep on being subsidized, plus exhausted deferments could possibly be renewed. These types of advantages aren’t available in any other government or private student loan consolidation programs. Private student loan consolidation programs normally add extra fees for consolidating the loans.

Advantages of State Student Loan Consolidation

Appearing a lot more place-specific, state loan consolidation programs are usually more flexible and forgiving. There are many states provide benefits for on-time or advanced payments, lowering rates of interest on downsizing amounts or direct withdrawal repayment methods, some time may include things like deferment choices for qualified students.

In most cases, many states are able to provide you the best options for government student loan consolidation. You should always do your own homework by exploring them for yourself.

The Way A Student Loan Consolidation Program That Can Help You

As a result of getting the student loan consolidation program to combine all your unpaid student loans, you will find out that you are able to benefit from at least 3 advantages:

1. You Can Save Some Money For Yourself

You need to pay interest for any loan you got. Even though typically student loans come with a lower rate of interest, but if several loans add up, the interest rate can be enormous for you as well. By using a student loan consolidation program to combine all your student loans, you may get a lower interest for your new loan and this will save you some cash on interest.

For instant, you have 3 unpaid student loans that you need to pay $200 every month to these 3 separate loan lenders. You will need to pay for a total of $600 each month.

However, if you go for loan consolidation by making only one payment per month with an extended repayment period, you may only need to pay for $400 per month and with lower interest. This is going to benefit you if you are just graduate and do not make more money with your initial salary.

2. More Convenient on Repayment

With several student loans, you are required to do more paperwork on the payment as well as due dates to keep track. There will be a high chance in which you may overlook on the payment due date and result in you for making a late payment.

There will be no more such hassle if you choose the student loan consolidation program with only a need to keep track of one record. Therefore, you will need to do less paperwork and less hassle for yourself.

3. More Repayment Possibilities

Applying for a student loan consolidation program can even introduce you to more opportunities for you. There’s a chance you’re provided with deferment options and even probabilities of repayment. Such offers can benefit you a lot in case you are planning to further your study, desperate to get a job or having financial difficulties.

In A Nutshell

Taking care of your several student loans are certainly not too difficult but you can even make your life easier and convenient by consolidating all of them with the help of student loan consolidation program.

As long as you are signing up for the right student loan consolidation program, you are going to enjoy the benefits it brought to you and you will have more time to focus yourself on your job in order to make more money to pay back the loan in no time.

How To Get The Best Out of It?

The college grads are more prone to get into financial troubles due to their reckless spending habits and financial mismanagement. Some of the expenses that constitute a part of a student’s financial list are College fees, Books, Stationery expenses, Birthday presents, and shopping.

student

Some of these are necessary and cannot be skipped. Again, if your finances are backed up by a student loan you may have to face the extra burden of paying it back each month.

Taking care of so many financial aspects along with the addition of the student loan can be a real problem. If you need to settle your financial woes soon you need to find out a solution that can take care of such debts before it gets unmanageable.

One of the best ways to do it is by consolidating all your loans into a single one. It will help you get all your loans in a single platform and pay them together. You do not need to remember them separately and the chances of defaulting on payments also get reduced. But there is a proper way to do it or you may end up paying more. Here is a checklist:

  1. Consider it ‘good debt’- Unlike other loans the student loans can be taken as good debts as the money is used in giving you a better future. You are not wasting it. With the help of the loans, you can pay off your fees, cater to your food and other expenses. The monthly payments on these loans may be high but you need to count them as a good expenditure.
  2. Multiple loans into a single one- You may have taken multiple loans to settle various financial woes. But with consolidation, you can collage them into a single one with a single interest rate. These can save you from defaulting on payments and remembering each due date. Managing a single loan becomes an easy task any day.
  3. Interest rates on single loans may be higher: The interest rates on different kinds of advances are different. Sometimes they are even higher than the consolidated interest rate on a single loan. If you can consolidate all your multiple credits with an affordable interest rate, you will be paying less than what you would have done separately on each.
  4. 4. Choose your lender prudently: If you want to consolidate your loans it is not necessary to stick to any particular lender. You can do it with anyone who offers you the best possible interest rates prevalent in the market. Before you decide on anyone make thorough research and make sure you are getting the best deal.
  5. Look for offers and discount deals: Try and look for deals which offer you incentives or discounts on interest rates. This will help you to reduce your payback amount. It is best to search for reputed firms which often provide for such discount schemes.

Apart from these you also need to be prudent about selecting the loan that can be paid be within a short period of time. You need to be extra careful while signing any agreement. Read the terms and conditions carefully and make sure you do not have any doubts about any clause. The consolidation process can be effective only when you are careful with your finances.

Private Student Loan Consolidation Qualifiers

If you do not want to apply for a loan through Federal Student Loan Consolidation, then the alternative for it will be the Private Student Loan Consolidation. You should know that most of the private student loan consolidation programs could be some sort of refinancing in order for you to get rid of your unsecured loan issues.

Even though all consolidated loans and their interest rates are regulated by the Federal and also the State Laws, however, the conditions and terms of the private student loan consolidation can be different from company to company.

While some of the loan companies offering higher interest rates than other companies, but the other benefits offered by them may very well counterbalance the deficiencies in their plans.

As a result, it is important for you to know in detail for all the plans offered by any private loan company since once you make up your mind to choose for the private loan consolidation, many loan companies out in the market are there willing to serve you. Even though you will find some of the loan companies look very promising, they may in fact be with a lack of intrinsic values.

Private Student Loan Consolidation Interest rates

Some of the loan companies able to give their customers some great benefits of the initial interest rate for the first year for as low as 7.9%. These rates are derived based on the 3 months LIBOR added with 5% to 8.5% interests. LIBOR stands for the London Inter Bank Offered Rates.

In contrast to the Federal Loan consolidation, you need to pay fees in the range of 1% to 5% on your personal credit as well as co-signer credit. All these nevertheless not going to get due at once and can only be billed on the loan closure.

Considering they are put into the loans it increases the volume of your loan however you will be able to enjoy the benefit for avoiding any additional upfront expenses that may accrue.

Private Student Loan Consolidation For Undergraduates

Generally, the interest rates charged in most of the private student loan consolidation plan for undergraduates are the same. The primary rate is LIBOR added with 5 to 8.5 percent interests. General, it could appear in the range of 7.9% to 11.93%.

Certainly, there are going to be charges of around 1% to 5% with regards to the form of consolidation you have selected. The absolute maximum term that’s allowable is twenty-five years and the optimum balance for which this type of consolidation is allowed is $50,000.

Get Private Student Loan Consolidation Online

With the help of the internet, you can get private student loan consolidation online easily. Many lenders are offering these types of loan consolidation services and what you need to do is just figure out what is the best consolidation loan rate for students.

You are able to get the free information package provided by the loan companies on their website by browsing through their Frequent Answering Question section. Some of the loan companies will have a team of experts to help you to get your consolidate your student loans.

Student Loan Consolidation Rate

According to the Education Department, students who are still in school or already can combine all their government-guaranteed loans which will be good news for students to clears their hurdles by stopping them to pay high interest rates.

If you are a student and wish to get the student loan consolidation rate, you need to check in detail at the time you prepare to sign for a loan agreement. You should cautiously take a look at every single item written on the agreements. Check if the student loan consolidation rates that offer to you is what you are looking for.

 

Some points to consider when coming to student loan consolidation plans

1. Make a thorough search prior to making any determination on student loan consolidation rates. Select a loan lender that is providing you with low interest rates and other additional services.

2. Make sure you only apply for student loan consolidation and not other loans as you may fall into the trap for paying some sort of loans that you are not able to pay back.

3. Nowadays, you can find some federal consolidation loans that come with a fixed rate for the student loan that you can apply. You are qualified to apply for one if you are studying in college at the moment.

You should go online to check and calculate for the new student consolidation loan rates and compare them to your current rates for your student loans. You may then rounded the figure to the nearest 1/8 of a percent of the weighted average for the interest rates on your student loans.

4. Federal consolidation rates can provide you with alleviation since you can extend your payment time frame up to 30 years. Therefore, you can just concentrate on your studies without having to worry about pay back the loan and you can just start paying the debts at the time you get a job.

Resolve Your Loan Headache

You may think of getting student loan consolidation due to the fact that the present students with career-minded tend to have the burden of getting multiple student loans.

As for your life, you may rather focus yourself on your career than keep worrying about your payments for multiple student loans. If you are in such a situation, you may consider getting a student loan consolidation which can provide you with a lot of benefits.

Knowing on How Student Loan Consolidation Works

The following is generally the way a student consolidation loan works. Each time a student initially applied for a number of student loans through different loan companies and agencies, the student will expect to receive several offerings with the different terms as well as interest rates to repay the student loans.

For student loan consolidation, the concept is to combine multiple student loans and make them into a single hassle-free loan. So, instead of making several payments for different student loans, the student can now just make one payment for the loan each month.

By doing so, it is able to saves the student money and time. Many people are going after this student loan consolidation is due to a number of benefits such as they will have a lower rate of interest and also less checks they need to write.

To have you know further about the benefits of Student Loan Consolidation, you can now read them below.

Getting Simple And Easy To Repay The Student Loan

With applying for student loan consolidation, you now need to only pay a single loan every month and only need to write a single check compare to you need to write several checks each month for your loan payments previously which can quite hassle for you.

Lower Monthly Interest Rate For Your Payments

If you get the right loan lender to consolidate your student loans, you may enjoy the benefit of lowering your payments each month by as much as 50%.

Extending Your Payment Period

You may have a lot of student loan debt. With federal consolidation loans, you may be able to extend the payment term up to 30 years. It’s a good idea to realize you will end up paying more interest over the life of your student loan consolidation. The idea is to get some leverage until your career takes off. You can focus on making money instead of several monthly loan payments.

Getting Fixed Interest Rates

By applying for federal consolidation loans you are able to get a lifetime fixed interest rate for your student loan. You’ll find it is good that if you carry out some researches to figure out what the best term and rates of interest you can get.

You may do the interest rate estimation by checking online for a new student consolidation loan by comparing your current student loan interest rates. After that, you can just round up the weighted average of interest rates to the nearest 1/8th of a percent on the student loans that you are qualified for.

In-School Loan Consolidation Programs

You are entitled to get a low interest rate for your loan if you are still studying in school. You may get yourself into the status of repayment, however, as you continue to study in school, they will put you into deferment automatically.

The disadvantage of having student loan consolidation at the time you are still studying is you are going to lose the six month grace period. However, there is still a solution for this as you can ask for the forbearance of consolidating your student loan for up to one year. If you not ready to get it, you should do your research online and learn more about it.

Online Student Loan Consolidation Assistance

By doing your own research using the internet, you will find the student loan consolidation the best suit you rather easily. By doing your searching online, you can find a lot of valuable information related to student loan consolidation with just a few clicks.

You are able to study yourself and get all the information you need by searching for related sites that published the most recent news and information related to student loan consolidation. And further, with a few mouse clicks, you can receive the quotations for the loan and do your comparison without having you run around in your area.

Student Loan Consolidation Can Helps To Relieve Stress

Student loan consolidation is able to assist student borrowers not to worry about their debt payments but rather to concentrate on their study.

By having one new loan that comes with lower payments every month, students are able to perform their more important tasks which is the study and so that while they graduate, they can get hired with higher pay and by then can shorten their repayment time frame.

So, you may consider getting a student loan consolidation service after knowing all the advantages that it can give you.

Warren Paine

Warren is the senior mortgage loan officer who has worked in mortgages and loan industry since 1995. He study in Harvard and major in Finance with a Bsc. Honor Degree. He possesses a Paralegal Certificate as well.

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