Why Should You Go For School Loan Consolidation

Why Should You Go For School Loan Consolidation

School loan consolidation, also known as student loan consolidation, is a way of unifying all your loans that you have incurred during the time that you are studying. These loans can be for your tuition fees, and you may have different lenders for each semester or term.

Receiving many student loan bills at a time can be very frustrating. Even a small payment amount can appear big to you because there are a lot of them, each with a different interest rate, due date and amount. It can be tough to keep track of these bills. Sometimes, you may even miss paying for one bill because when you have paid for the others, you thought you have paid for everything else. To relieve you of this problem, federal law would allow you to consolidate all your loans so that every month, you would only receive one bill with one due date. This is a lot more convenient than receiving a bunch of bills a month.

With school loan consolidation, you would have lower monthly payments compared to the sum of the individual loans per month. It would prevent you from getting a bad credit history because you now have the capability to make payments on time. Plus, you can expect no late fees if you pay on time, contrary to paying different due dates and missing one bills because of confusion.

Who are eligible for school loan consolidation? Anyone is eligible. However, for people with bad credit rating, they have lower chances of getting approved with a private lending company. Do not lose hope, though, for there are federal student loan programs for you.

If you have a credit rating of more than 660, you will automatically be eligible even for private lenders and chances are you would get the lowest individual rate possible. According to the Federal Family Education Loan Program of FFELP, every lender is required to have the same rate offering, although your individual rate is different from this. An individual rate is dependent on your credit rating and on the average rate of all your outstanding loan balances.

If you have decided to get school loan consolidation, you should look into various lender's offers first. Many lenders offer not only discounts but also some benefits. Some will give you lower interest rates if you have paid correctly in the past few months. Also check carefully not only the interest rate but also the payment schedule. How long are you going to pay for the consolidate loan? A low monthly payment but lasts for ten years is not very amiable.

Getting school loan consolidation is actually a smart move so that you would avoid missing any payments and you wouldn't mix up your payments. If you have not yet found a stable job after college, this can be very helpful for you. It can also increase your credit score. But then, as with every other loan, discipline must be enforced. School loan consolidation usually offer discounts and lower rates, but make sure you pay correctly and on time.

When and Why Should I Consolidate Private Student Loans

When and Why Should I Consolidate Private Student Loans

Imagine a graduation ceremony with family and friends. The happy student takes a few precious steps across a stage, then accepts a diploma while smiling for the camera. The student becomes a bone-fie college graduate; the last thing on his mind is how he is going to repay his student loans when they come due in six months. However, like it or not, those bills come due quickly and are often harder to pay than what was originally thought.

Unfortunately, this is an all too common scenario that repeats itself at the end of every semester. Despite loan counseling and student loan workshops, students are often ill-prepared to handle the amount of debt that will come due once they are no longer enrolled in college. Who can blame them? While in college, students are focused on projects and exams, not some hypothetical, distant future. No one imagines themselves working part-time six months after graduation because the job economy is so competitive, they can't get a position within their chosen field - let alone that they will be unable to repay their loans. In all reality, this happens quite often. Though there is little to be done about the job market, one can consolidate private student loans in order to ease the financial drain the repayment process will cause.

When to Consolidate Private Student Loans

Unlike federal student loans, private loans carry variable interest rates that can produce some pretty hefty hikes in payment amounts if the rates begin to fluctuate. Most students have several different loans; an individual that will consolidate private student loans will immediately begin to save money but the timing is not the same for everybody.

If the borrower had a limited credit history when the loans were originated, it is probably best to make regular payments for the first few years in order to improve his credit score. As everyone knows, the higher the credit score an individual can obtain, the better interest rates and incentives he is likely to receive from lenders - this is no different in regards to consolidating private student loans.

Also, consider consolidation as a way to become the sole borrower on the account. If the loan required a co-signer, he will be removed upon consolidation and thus no longer be liable for any part of the account. This is usually only possible after two to four years of making regularly scheduled payments.

Advantages in Consolidating

By consolidating your loans, the borrower can:

1. Receive a lower interest rate - most lenders offer automatic payment and relationship discounts; these discounts may appear minimal at first, but often add up to big savings over the life of the loan.

2. Have an option of rates - the borrower may choose a fixed or variable rate in order to receive the most competitive APR for their unique situation.

3. Maintain peace of mind - if an individual has multiple student loans, consolidating into one monthly payment will simplify his finances and just make life easier.

Most lenders also offer such services as loan specialists, high-limit consolidations, and online account access. Research each lender to determine their specific benefits and conditions.

Consolidating private student loans can last up to sixty days and is a lengthy, time-consuming project. However, for most borrowers consolidating is an excellent step towards financial independence.

What Does it Mean to Consolidate Student Loans

What Does it Mean to Consolidate Student Loans

Loans are almost inevitable for many people. If you ever want to buy a house, buy a brand new car, or go to college, there is a good chance you will have to take out a loan. Going to college is a huge source of loans for people, especially for those going to a very expensive college.

When you get your tuition bill, the first thing you do is think about how you are going to pay for it. Do you get any financial aide? Do you have any scholarships that can help pay for it? Do you have any money saved from your job? Will your parents help pay for any of it? When all other sources of money are gone, you turn to loans.

Now that you have graduated from college, you probably have a wide variety of loans to pay off. The Stafford loan is a very common student government loan. It is offered in a subsidized or unsubsidized version. If you were lucky enough to get an unsubsidized Stafford loan, the government has been paying the interest for you throughout college. You may also have a Perkins loan, Graduate PLUS loan if you went to graduate school, personal loans, private loans, and credit card debt from cards you used to pay for tuition, buy books, or use throughout college. These add up to a lot of money that you owe.

After college, you either go to graduate school, get a job, or do both. Most people can't afford to continue to go to college full time, so they get a job and take graduate classes part time. If you get a well-paying job, that is great. You can quickly pay off your loans, save for a house, and get going with your life. If you decide to go for more professional schooling, such as medical school, dental school, or law school, you have several cheap living years ahead of you and more student loans to tack on. Usually this works out because you can make a lot of money with these careers soon after you graduate.

If you are unfortunate enough to get a low paying job out of college, as many are, you can be in a tight situation. Even with a degree, it's hard to get a high paying job out of college. It will take years of experience, promotions, and raises to get to a comfortable income. The real problem is that most if the big expenses occur when you are young out of college. You need to pay off your loans and try to save.

If you have lots of loans and the payments are outrageous, you can soften the blow. Try to consolidate your student loans. If you have several government loans as well as private loans, you can consolidate them into one loan with a lower consistent interest rate and effectively lower your monthly payments. This can be a huge help when you are just starting out.

Student Loans Can Be Cleared in More Than Just One Way

Student Loans Can Be Cleared in More Than Just One Way

Lenders tend to share the same opinion that student loans should be offered on more flexible terms that other loans. This is great news for students, who might otherwise seriously struggle to handle the financial pressures. But, the loans will have to be repaid eventually, meaning the debt hangs over them until graduation.

The idea of the scheme is that a student graduates, gets a job and then repays the loan, by which time the interest built up will be substantial. In fact, loans for students are highly flexible because even when it comes time to pay, the repayment schedule can be negotiated.

Not only that, but periodic payments when a student is flush, usually after the summer break spent working, helps to reduce these loans to cover student expenses and fees. In fact, there are a number of ways in which graduates can repay their loan debt.

Repaying Independently

The most obvious method is to simply pay the student loan off though an agreed monthly repayment plan. This can usually be done automatically, with the money required simply taken out of the salary figure deposited into an account on pay day. This works well because of the structure, but the only catch is the graduate needs to have found a job.

The advantages to lenders offering loans for students is that they tend to develop a healthy relationship with their young customers. But part of developing that relationship is to be flexible. For that reason, it is possible for students to meet with their loan officer and work out an affordable repayment scheme.

The fact is that loans to cover student expenses and college fees can add up to quite a lot over the course of university life. By the time of graduation, the student might own $150,000. So, negotiating a workable repayment solution is essential. It may take 15 years to repay the loans, but it can be more easily handled that trying to pay the sum over 5 or even 10 years.

Debt Consolidation

Of course, it is possible too that student loans came from a number of sources. For example, the loan from one lender for $25,000 was added when extra cash was required, of $5,000. Perhaps one or two other loans were picked up along the way, as particular financial difficulties cropped up.

The sheer number makes it necessary to consolidate all these loans for students into one management figure. This simplifies the situation, reduces the repayment amount, and can effectively lessen the financial burden.

Unfortunately, because the lenders have already been patient in issuing loans to cover student expenses and fees with a repayment delay of maybe 5 years, the interest rate can be high. Over 20 years or more, the total interest paid can be huge, but the important thing is that the repayments are manageable, and not a struggle.

Alternative Payment

There are other ways to pay student loans, without having to actually pay any money. For many, this is a very attractive prospect, but of course nothing is for free in this world. The scheme involves a graduate either serving their debt in the armed forces or doing community service.

This method is referred to as loan forgiveness, and allows the graduate to write off a large portion of these loans for students each year, and over a number of years pay it off completely.

Under the GI Bill, for example, military service will wipe as much as $20,000 off the debt, while a further $5,000 per year will be removed from the total owed if the graduate teaches in deprived urban areas or in isolated rural communities.

In this way, loans to cover student expenses end up helping to get these same students involved in community activities.

Student Loan Consolidation Interest Rates 5 Tips For Getting the Best Rate

Student Loan Consolidation Interest Rates - 5 Tips For Getting the Best Rate

A college or graduate school education is something that you can proudly carry with you for the rest of your life. Having graduated means you can be confident in the knowledge that you have a solid grounding in a depth of learning that can launch a career and inspire a thoughtful life.

For many graduates, along with the pride of accomplishment that accompanies college graduation comes the burden of student loan debt. It is not uncommon for grads to easily carry over one hundred thousand dollars of debt burden on their shoulders for years and years after graduation.

Depending upon how things go with their job search after graduation, college graduates may make enough money to make their monthly loan payments at first. However, as time passes and new demands like buying a house and raising a family start to get piled onto the graduate, managing student loan payments can become increasingly challenging.

The challenge of having to make monthly student loan payments can be particularly hard for those with multiple student loans. Having more than one student loan requires having to make different payments to different lenders, usually with payments due on different days of the month. This is inconvenient, to say the least.

Consolidate If You Can Get A Good Rate

An excellent solution for grads in this situation is to consolidate one's student loans. Through private loan consolidation, you will have just one loan - which means a single interest rate and single payment each month. It can also allow you to spread your payments out over up to 30 years, which could very well lower your monthly loan payments.

Of course, it is only a good idea to consolidate if you can get a better rate than that of the average rate of your current loans.

How Private Student Loan Consolidation Interest Rates Are Calculated

If you currently have private student loans, you are going to want to consolidate through a private consolidation lender. In this case, your new rate will be calculated based upon a combination of the current prime rate (or other standard rate index) and an additional margin determined by your credit (FICO) score.

5 Tips For Getting The Best Rate

If you choose to consolidate your loans, you are going to want to do everything you can to qualify for the best rate. Here are 5 tips for doing just that:

1. Run your credit report with all three Big Three credit bureaus: Since your new rate will be determined in part by your credit score, start the consolidation process by running your credit report with TransUnion, Experian, and Equifax.

2. Calculate your current weighted average interest rate: Calculate the weighted average of the interest rate of your existing loans. The result of your calculation represents the number you want to try to beat with your new interest rate.

3. Research loan consolidation lenders: Do some online research and create a list of at least 10 lenders that specialize in student loan consolidation. While you may be tempted to just find one or two, remember that your chances for getting the best-possible deal go up significantly if you are applying with multiple lenders.

4. Maintain a research log: As you compare lenders, be sure to keep meticulous notes in Excel or with pen & paper, including lender name, contact name, contact phone, published rates, and credibility of website.

5. Apply to at least 5 lenders: Now, you can start applying for a loan. Remember, apply to at least 5 of the best lenders you researched.

In the end, getting the right student loan consolidation interest rate is about knowing what rate you are trying to beat, how to do your research, and how to select the right offer. Doing so could lower your monthly payments by $100 or more.

Student Loan Consolidation Companies

Student Loan Consolidation Companies

With the recent economic crisis making matters worse for people already in debt, it has especially been difficult for those who are struggling to get gainful employment and have student loans to repay. These people have to seek out student loan consolidation companies for readdressing their debt situation. According to statistics, people have to pay almost 15 percent of their discretionary income towards repayment of student loans. The recently passed Health Care and Education Reconciliation Act of 2010 promises to lift some burden off the shoulders of people with student loans. Certain reforms in the act are very promising but do not qualify most of the population reeling under education loans. Under the new act, students who repay their student loan on time for 20 years are eligible for debt forgiveness, earlier the time limit was 25 years.

Student Loan Consolidation Companies Reviews

For a person reeling under debt, it is crucial to seek out the best student loan consolidation companies to help deal with the financial situation. Checking the credentials of the company is very important, do so by looking up the company on the Internet and by asking around on finance forums. Consider all the pros and cons of before entering into a contract with any company. Here are some of the best student loan consolidation companies 2010.

Care One Providers Like most student loan consolidation companies 2010, care one providers are an online debt consolidation company who help people better deal with their debt situation. They claim to provide personalized options to suit individual needs when it comes to debt consolidation. Some of the services they provide are debt management, settlement, and counseling to . Their website also claims that they can reduce the interest rates and lower monthly payments to help people deal with their debts. The website also answers queries regarding .

American Debt Resources Inc. They have been operational since the year 2001 and are quite aware of the financial management plans required to help people with a debt problem. American Debt Resources Inc. claim that they will be able to consolidate your student loans in one monthly installment. Unlike some other consolidation services they offer shorter repayment periods which will benefit the client. The company also proclaims that it will address the issue of late payment fees and other penalties accrued by the client on the debt. They consider themselves one of the top student loan consolidation companies.

Federal Loans If you are looking for federal student loan consolidation companies, it is a good idea to check the official government education loan consolidation website. The site has information about two government programs that allow a borrower to consolidate existing loans. One of the programs is the Federal Family Education Loan program and the other is the Direct Loan Program. The interest rate offered may be lower than the existing loans that you may have. They offer to extend the amount of time needed for repayment and offer low installment repayment options. Refer to their site for .

Chase Student Loans They are one of the better companies amongst the ones available in the market today. The company does not consolidate federal student loans and as far as private loans are concerned the eligibility criteria is a minimum loan amount of USD 7,500 and maximum of USD 150,000. They offer to consolidate your student loans by combining your different installments in one reduced monthly installment. They do not charge any application fees and have competitive rates in the market.

Be careful when you choose student loan consolidation companies, remember to check their credentials before getting into any sort of agreement. It is also advisable to check free credit counseling companies before you get involved into any sort of contract for debt consolidation.

Student Loan Consolidation The Positives and the Negatives of Rolling Them All Together!

Student Loan Consolidation - The Positives and the Negatives of Rolling Them All Together!

You are now a college graduate and you know that 6 months from now you will have to start paying back those loans you took out each semester to cover tuition, fees, books, and living expenses. This can be a very large chunk of money and it can be very stressful. However, you can use student loan consolidation to make life a little easier on yourself.

The negatives of using a consolidation loan for students is that you might lose some of your benefits if you are not careful. Right now you can use the deferment option to put off paying them until you find a job or until you can afford to do so. You can also use the forbearance option if you become unemployed and unable to pay. These both protect your credit and you don't want to lose them.

The positives are very numerous when it comes to student loan consolidation. You can keep your benefits if you shop around to find the right lender and you can get a similar interest rate as what you have not. Plus when you consolidate your loans you will have only one payment to one lender instead of multiple payments to multiple lenders.

This can make your life easier and make it much simpler to set up a budget that you can work with. It is always better to only have to manage one payment instead of multiple payments. This should be a low enough payment that you can afford it and if you can afford more it is always good to pay more money than less.