Consolidate School Loans: 2012

Thursday, March 15, 2012

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

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

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

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

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.

State Based Student Loan Consolidation

State-Based Student Loan Consolidation

Each State Has Different Options Regarding Student Loan Consolidation

A perusal through a comprehensive list of state-based student loan programs will reveal a wide variety of options available to students who need to borrow to finance their education, including both federal loans and private loans. What students may not know, however, is that many of these programs also offer special college consolidation loans. After graduation, many students are disillusioned to face the harsh reality of having to deal with college loan repayment. For most, college loan consolidation can prove a helpful way to manage one's finances in an easier and more responsible manner after college. Consolidating several different loans into one convenient loan will typically result in a lower interest rate, which will lower your monthly payment and give you some slack in repaying it. Sometimes, you may end up with a higher interest rate, which will raise your monthly payment, although it will also shorten the lifespan of the loan, allowing you to take the financial burden off your shoulders sooner than later.

Benefits of College Loan Consolidation

Student loan debt consolidation can present many benefits to students struggling to pay back their loans. For instance, those taking out will be pleased to learn that the College Foundation of North Carolina offers an interest rate reduction of 0.25% for borrowers who consolidate their loans and make their payments automatically via a debit system. In addition, the interest rate drops by 0.5% after 24 consecutive on-time payments, another 0.5% after 36 consecutive payments, and 1% after 48 consecutive payments. This means that after 48 consecutive on-time payments using the automated debit system, a recent college graduate from Durham or Chapel Hill will have had his or her interest rate reduced by 2.25%!

Options for States without Their Own Consolidation Programs

Depending on your state, there is a variety of both federal and private student consolidation loans from which you can benefit. State consolidation programs, like most other programs, will consolidate various different federal student loans, including and Stafford Loans, while private programs may allow you to merge federal and private loans in some cases.

Nevertheless, not every state has its own federal consolidation program. These states are serviced by companies such as United Student Aid Funds (USA Funds), which is the official national guarantor for student loans and the designated guarantor for several states. Indiana student loans and Arizona student loans, for instance, are consolidated through USA Funds.

Private Student Loan Consolidation Fixed Rate Explained

If you're thinking of making use of fixed rate private student loan consolidation you'll be moving your entire loans directly into a single payment. This is a good approach because it simplifies the management of your finances and you won't be required to deal with multiple repayments. You'll have a single monthly payment, along with one rate, one payment due date as well as a single provider.

This loan consolidation program will aid you with a hassle free credit evaluation. Simultaneously it will provide you with a rate reduction simply because you only have a single rate instead of the various rates associated with split loans. You'll find infinite rewards whenever you consolidate a loan. One is that you may secure a reduced monthly repayment rate as a result of a lower rate of interest.

It is highly beneficial when you use a reputable loan consolidation company immediately after you have graduated and once you found your first real job. According to lenders as well as creditors, your credit rating is extremely important therefore you ought to have a credible financial track record. When using a fixed rate private student loan consolidation program, you will possess a favourable credit rating seeing that you are settling all your outstanding debts at once. In addition this will result in a lower fixed rate of interest since you have a single rate instead of adding up the interest of separate loans.

By using a variable rate loan, the interest incurred on the outstanding amount due to the loan provider will be subject to change within the period of the loan. Consequently, because of this your monthly instalment can change should this happen. On the other hand, using a fixed consolidation rate will enable your monthly instalments remain unchanged. This provides the borrower with the luxury of anticipating and budgeting for the required repayment amounts in the foreseeable future.

Pay Off Student Loans 3 Tips For Quickly Paying Off Your Debt

Pay Off Student Loans - 3 Tips For Quickly Paying Off Your Debt

Looking for ways to pay off student loans? After you complete college, you main focus is gaining adequate employment in your chosen field. But for far too many, the stress of paying off college debt is exhausting. Entry and mid-level positions often times simply do not pay enough to quickly pay down student loans; especially when you factor in the cost of living. Thankfully there are a few solutions to help you pay down your student loans.

One is the Income Based Repayment plan (IBR). What happens is government loan officers will look at your current income and come up with a repayment plan that you can afford. People with graduate degrees often have monthly payments of over $1000. With an IBR, that payment can drop down to $300. Another upside to the IBR is if you choose to work for the government, a non-profit organization or as a volunteer, after certain amount of years you may be eligible for loan forgiveness programs, where your loan amount and any interest accrued will be forgiven.

Another option is to apply for as many scholarships and grants as you can. This is money that you don't have to pay back. Also if you work, see if your employer offers any type of tuition assistance. Many companies do, especially if the field you are studying is relevant to your current position. If you don't work, get involved in a work-study program. These jobs are usually a part of your financial aid package and the work is conveniently located on campus. Whether you work on campus or through a private employer, try to save at least half of your income in a high-interest savings account. That money will really come in handy at the end of your college education and you can apply it to your student loans.

Then there is loan consolidation. Sometimes the method of consolidating college loans gets a bad rep. But the negativity comes from programs that charge a high interest rate to consolidate. An easy way around this is to do your research. Find the best student loan consolidation program, offered at the best rates. Get quotes and be sure to read all the fine print. The only bad thing with consolidation, is usually once you go this route, you will not be eligible for any type of loan forgiveness program.

Paying off student debt is a hassle. But if you research all the opportunities available to you, you may be able to pay off student loans sooner than you expect.

Low Interest Student Loan Consolidation Consolidate Student Loan With Low Interest Rate

Low Interest Student Loan Consolidation - Consolidate Student Loan With Low Interest Rate

Loan Consolidation is done with the help of private institutions as well as by the Federal Government. In the case of Federal student loan, the existing debts are purchased & closed by a debt consolidation company or by the United States Department of Education. This primarily depends on the type of Federal low interest loan that a student holds. The interest rates for student loan are based on annual rate in United States. These rates can be anywhere between minimum of 4.70% to maximum of 8.25% for the Federal Stafford loans and 9% for the Plus loans.

Here are some essential tips to consolidate student loans with lower interest rate

The current US consolidation program allows the students to consolidate once with the private lender and then re-consolidate again only with the Department of Education.Re-consolidating does not change the rate of interest.

In case the students combine the credits of different types & rates into one new consolidated amount, they can enjoy a weighted average calculation that would establish an appropriate rate based on the current interest rates.

This process is something like refinancing, but the key difference is that the interest rates do not change in this case.

Taking up loan consolidation services is better. The private lender charge lot of fees.

It improves the student's credit rating for the future as well.

It reduces the actual amount of your monthly payments significantly and simplifies the finances.

Some of the options that you can take up are Federal Stafford, Perkins, Parent PLUS, Government Direct Credits, etc.

They help you save your time that you can further invest in earning or studies. They share a major chunk of your responsibilities like documentation, etc. hence keep you relaxed.

How to Consolidate Student Loans Federal Versus Private Loan Consolidation

How to Consolidate Student Loans - Federal Versus Private Loan Consolidation

Student loan consolidation can be used by student or parent borrowers to combine their multiple education loans into one loan with one monthly payment. As any student can take either federal or private student loans, he or she can also take a federal or private consolidation loan to make the education debt more manageable.

Both federal and private student loans offer significant benefits, but federal loans offer borrowers many benefits that don't come with private loans; for instance: low fixed interest rates, income-based repayment plans, loan forgiveness and deferment options. While some private lenders may offer them too, it usually is associated with some strings attached.

For those reasons, every borrower should always exhaust federal student loans options before considering a private loan. The same advice applies to consolidating student loans - always look at federal consolidation loan first and only if you don't qualify for a federal loan of it is not the right choice for any reason, and then seek a private consolidation loan.

It is important to remember that a federal student consolidation loan can't include any private loan. Moreover, if you consolidate your federal student loan into a private consolidation loan, you will lose your federal borrower benefits mentioned above (unless you private lender tries hard to get your business and includes them in the offer).

There are important differences between federal and private student loan consolidation.

First of all, with federal student loan consolidation, you will have a fixed interest rate, while private student loan consolidations are credit-based, which means that your consolidation loan rate will not be locked - it will be variable. So, while you will not have to go through credit check in order to apply for a federal consolidation loan, you will need it to secure a private consolidation loan.

Student loan consolidation rates are determined differently for federal and private consolidations. The interest rates for federal loans are set according to a formula established by federal statue. It's a fixed rate, based on the weighted average of the interest rates on each of your loans at the time you consolidate, rounded up to the nearest 1/8th of a percent and capped at 8.25%.

As private student loans are not funded by the federal government, they are subject to the terms determined by each individual lender (bank, credit union, other financial institution) and the market competition. In private student consolidation loans a borrower's credit is the primary factor in the variable interest rate offered to the borrower. As the base for setting the consolidation loan interest rate, the private lenders most often use the Prime rate or the 3-month LIBOR Rate, to which they add a margin. That margin varies from lender to lender and is applied according to the borrower's credit rating.

With regards to the interest rate on the consolidation loan, it's typical for both federal and private consolidation loan to include 0.25% rate reduction for automated debit payments.

Repayment of federal student consolidation loans begins within 60 days of the disbursement of the loan, with the payback term ranging from 10 to 30 years, depending on the amount of education debt being repaid and on other debts owned, as well as on the repayment option chosen by the borrower. Private student consolidation loans can also have repayment terms of up to 30 years, although they have fewer repayment options. Usually, repayment begins 30 days from the time your private student consolidation loan is funded.

While the most important factors looked at when deciding about how to consolidate student loans are the interest rates, borrower benefits and the terms of repayment, there are also other significant factors, such as: fees or cost to consolidate, prepayment penalties, loan amount limits, customer service, etc.

There are no fees or application costs whatsoever for processing and providing a federal student consolidation loan. It's against the law to ask for advance (up-front) fees for arranging a federal education loan or consolidating federal education loans. However, some federal education loans (e.g. the Stafford and PLUS Loans) may require some fees, but they are always deducted from the disbursement check. On the other hand, private lenders may charge fees for application and processing private consolidation loans. Some private lenders charge fees as high as 4% of the principal you owe.

Federal consolidation loan programs don't require a minimum balance to consolidate student loans; some private lenders require a minimum balance before they consider a borrower's application for consolidation. That amount varies from lender to lender, but usually is between $5,000-$7,500 in US-issued private education loans.

With both federal private consolidations, there are no penalties for prepayment - all payments in excess of scheduled payments will go directly to principal and that will help to repay your consolidation loan faster.

The application process for consolidation of private student loans differs from the federal consolidation. Sometimes application for private consolidation loans may be easier to complete (often done online or over the phone). However, it's worth remembering that federal loans usually have lower interest rates, borrower benefits and better repayment terms than private student loans. Moreover, federal applications for both original loans and consolidation loans require FAFSA, so with the federal consolidation, your application is already partly completed.

Federal Consolidation Student Loan 5 Tips

Federal Consolidation Student Loan - 5 Tips

Being a student in a higher educational institution is a rich and rewarding experience. It is also a privileged one: only a small percentage of the world's population has the opportunity to go to college or graduate school.

With that privilege comes responsibility. Part of the responsibility that comes with higher education is that of paying for the education itself. Some lucky students enter college, study for a few years, and then graduate without ever having to pay a dime of their own money or take out a loan. However, for the majority of students, attending college requires taking out one or more student loans.

The responsibility for making student loan payments begins not long after graduation, when the grace period ends. Student loan payments can be a heavy burden, especially for recent grads who have not yet had the chance to get a high-paying job but who still must keep a roof over their heads and pay for food. It can make money very tight.

For graduates who hold multiple student loans, loan consolidation can significantly reduce the amount of their monthly payments. How does it work? It's pretty simple: by consolidating their loans, students can stretch out their payments over more years than their current loans allow.

For example, their current loans may have repayment schedules of 5 or 10 years, whereas with consolidation they can stretch out their payments over 30 years. Doing so will definitely bring down the monthly payments they have to make.

Federal Versus Private Loan Consolidation

If you are interested in consolidating your loans, you will need to first determine whether you should apply for federal or private consolidation. Put simply: if your existing student loans are federal loans, you should apply for federal consolidation. Otherwise, private consolidation is what you need to pursue.

If you are wanting a federal consolidation student loan, here are 5 tips that can help:

1. Decide Whether To Consolidate:

First, decide whether it makes sense to consolidate at all. For example, if you are more than half-way through repayment of your existing loans and are able to make monthly payments, consolidation may not make sense.

2. Take An Account Of Your Existing Loans:

If you believe consolidation is the right path for you, start by taking stock of where you are now. Write down all of your student loan balances and interest rates. This is important because the interest rate for your new federal loan will be a fixed rate and it will be calculated by taking the weighted average of the rates of your existing loans.

3. Determine Whether You Qualify For A Federal Consolidation Loan:

Check out the U.S. Department of Education website to find out which federal student loans qualify for consolidation.

4. Figure Out The Repayment Period You Want:

Since your interest rate will be determined for you based upon your existing loans, the most important strategic decision you can make in the consolidation process is that of choosing the right repayment schedule (e.g., 10 years, 20 years, etc.) for you. In general, your rule of thumb should be to choose the shortest possible repayment period while still leaving you with manageable monthly payments.

5. Fill Out An Application:

Finally, fill out the federal student consolidation loan application and start on the road to approval.

Federal consolidation student loans are a snap if you take the right steps. The end result could be a very significant reduction in your monthly loan payments.

Defaulted Student Loan Help

Consequences of Student Loan Default

Defaulting on student loans, administered by the Federal govt. or by a private agency, can have serious repercussions. The borrower may get sued and the lender may obtain a writ from the court authorizing wage garnishments that may withhold up to 15 percent of the erstwhile student's disposable income. A default on student loans can show up on the credit report for 7 years from the date of default and adversely affect the capacity to borrow money. Federal loan defaults result in diminishing a person's ability to avail FHA and VA insured loans in addition to possible wage garnishments. Federal benefits like social security retirement and disability benefits and income tax refunds may also be withheld in lieu of unpaid amount.

Defaulted Student Loan Help

Loan Rehabilitation: A loan rehabilitation program offers the facility of reinstating defaulted loans. When a person defaults on student loans, the information gets conveyed to the credit bureaus that record the default status. Hence, the defaulter's credit report, credit history and credit score are adversely affected. Rehabilitation of the defaulted loan makes the borrower eligible for the benefits, that were available prior to default, by wiping-off the blemish of default from the credit report. The penalties, that were levied on the defaulter in the form of wage garnishments and the inability to avail further loans, become redundant. Students are advised to explore the option of rehabilitating defaulted loans. Loan rehabilitation facility is available for loans that have been disbursed by the Federal government either directly or indirectly. Private student loans can be rehabilitated if the lender has a rehabilitation program.

Rehabilitation is the process of reinstating defaulted student loans by making payments as specified by the lenders. Money procured by the lender through does not count towards the required payments. Federal Direct loans and loans administered under the Federal Family Education Loan (FFEL) program may be rehabilitated by delivering the agreed amount in 9 installments over a period of 10 months. Perkins loans can also be rehabilitated by paying the agreed amount in 9 installments to the entity concerned.

As mentioned earlier, private student loans can be rehabilitated provided the lender offers rehabilitation programs. Lenders, who offer rehabilitation programs, can charge a collection cost on amounts not exceeding 18.5% of the unpaid principal and accrued interest.

Loan Consolidation: A consolidation loan allows the borrower, who is straddled with a number of student loans, to combine different loans and replace those, preferably, with an unsecured loan having relatively favorable repayment terms. Consolidation thus helps to simplify repayment. A person with a single loan can also opt for debt consolidation. Consolidation should not be confused with refinancing, since the latter refers to discharging a secured loan by availing another loan, usually of the same size, collateralized with the same security. Private lenders and the Federal govt. provide consumers with the option of consolidating student loans, that have been defaulted, under certain conditions. For instance, borrowers who have defaulted on their FFEL loan need to make 3 monthly loan payments, in full, to receive a FFEL Consolidation loan.

Federal Stafford loans, provided under the FFEL and the Direct loan programs, can be consolidated by students after completing or dropping out of school. Students, who are enrolled in school with less than 50 percent attendance, can also consolidate their Stafford loans. PLUS loans, viz. Parent Plus loans and PLUS Loans for Graduates and Professional Degree Students, can be consolidated once they have been disbursed.

Private student loans can be consolidated by availing student consolidation loans, from banks, with a maturity period of about 25 years. Private student loans cannot be consolidated using Federal consolidation loans.

One cannot do away with the obligation of repaying student loans since lenders can use one of the aforementioned techniques to recover defaulted loans.

Consolidating School Loans

Education is often considered as one of the primary necessities of any human being. Unfortunately, in today's world, education is becoming more and more costly, and the consideration that one needs to pay in order to avail it, is increasing with every passing academic year. Fortunately, in many countries, elementary education remains comparatively very affordable to many people.

Student Loans When it comes to higher learning and advanced education, students all across the world have to rely on scholarships or financial aid by government. Scholarships and government aid is however available only to a selected few. In order to address such problems the lenders and bankers have come up with an excellent solution of providing student loans. The governments have also realized the importance of student loans that are originated by lenders. In support of the student loans, governments have passed significant enactments in order to legally monitor and also promote, these loan programs. In addition to that in recognition of scholastic ambitions of students, the government has also launched many federal student loans. It so happens that at times, the students find many debts piled up in front of them in process of perusing their bachelors and masters, educational programs. This is where many students may face financial troubles and debt consolidation loan becomes the best alternative to get out of debt.

How to Consolidate School Loans? In the concept of consolidating school loans, the term 'school loan' basically represents a student loan that is undertaken in order to finance higher education. The process with the help of which one can consolidate a student loan, is quite simple and works as follows. Calculation of Principal: Student loans that are granted by lenders can be as high as $20,000 with a rate of interest, that may exceed 6%. If a student is unable to repay more than one loan, then the lender who is providing the consolidation loan, first calculates the total principal amount of the consolidation loan. This is basically done by adding up all the unpaid installments and interest of all the loans that the student wants to consolidate. Calculation of Rate of Interest: The rate of interest is sometimes calculated on the basis of weighted averages of the previous loans. However in maximum cases, the lender prescribes a new rate of interest and installments. Collateral: A collateral is another aspect that one needs to consider while consolidating school loans. As a student is a fresh graduate and has just started working. Thus the lenders usually, do not demand any collateral. Though in some cases lenders may demand a collateral, which is supplied by parents or guardians. Credit Rating: Any student with an average credit rating can qualify for a student consolidation loan. In some cases where the credit rating is bad, consolidating school loans becomes really difficult as very few lenders provide consolidation at a bad credit. The consolidation loan usually gets approved in a few days time and students can take advantage of its many benefits.

Benefits of Consolidating School Loans Consolidating school loans can prove to be of benefit. Some of the benefits have been listed below. The consolidating loan usually has a low rate of interest, which makes the amount of very monthly installment very less. A low monthly installment means that one can easily afford to pay the installment, consistently. Consistent and timely payment of installments, proves to be of benefit, as it drastically improves the credit rating, credit score and credit history. As a result of the consolidation, you also need not go in for a debt negotiation or a debt settlement program, as programs that involve debt management and settlement, lead to a decline of credit rating. The debt consolidation also saves you from bankruptcy To know more about student loan consolidation, read on:

Consolidating school loans is always advisable, as it is easier, affordable and convenient. Though the time span for which the loan runs is long, it is an effective and affordable method to avoid financial crisis.

Good Luck!

Consolidating Default Student Loans 3 Steps

Consolidating Default Student Loans - 3 Steps

Graduating from college or graduate school is a huge accomplishment for which you should be proud. Anyone who is fortunate enough to have done so can be sure they are a hard-working, responsible person. Most also feel lucky to be able to live in a country where they could have the opportunity to receive a higher education.

There are a lucky few college attendees whose education is paid for via family money, hard-won personal savings, or full scholarships. However, the majority of people who attend college must pay for it with a combination of loans and working while in college.

It is a privilege to have access to loans to fund the college experience, no matter how one gets the money. However, unlike in the case of family money, personal savings, or scholarship-financed college educations, taking out student loans requires years - or even decades - of repayment.

Upon graduation, of course, most education loans have a short grace period. After that, the payback period begins. With a vengeance.

What Is A Default Student Loan?

Almost everyone who takes out one or more student loans has every intention of repaying them. However, reality does not always cooperate with our plans. Sometimes, a graduate may have trouble finding a job. Or, they may find a job but then lose it. In other cases, the graduate finds work, but the job does not pay enough to support all of their needs like housing, food, or supporting a family. In these cases, graduates find it hard to repay their loan. Some of them go into default.

A defaulted loan means that the borrower has trouble paying back the lending company. If you go into default on a federal loan, the government has a number of options at their disposal to collect. They can use tactics like intercepting tax refunds due, garnishing a paycheck, and removing certain federal benefits.

In short, defaulting is painful, and the government does have real power to make your life miserable for a long time until repayment is completed.

One Solution: Consolidating Default Student Loans

One solution to that can help students who have defaulted or are considering defaulting on their loans is consolidating default student loans. Loan consolidation offers a number of advantages, such as simplifying repayment (by having only one lender to pay instead of two or more), lowering payments and securing a fixed interest rate that you can count on over the life of the loan.

3 Steps To Consolidating

Student loan consolidation is easy. Here are 3 recommended steps:

1. Figure Out Your Desired Repayment Period: When you consolidate your student loans, you have the opportunity to determine your desired repayment period. With consolidation loans, you can choose up to a 30-year repayment period in most cases. The good thing about a longer repayment period is the lower monthly payments. The only drawback is that the loan will cost you more in total interest payments over the life of the loan.

2. Calculate Your New Payment Amount: Use an online loan calculator to figure out your new monthly payment amount. Just have ready the following information: your total outstanding loan balance, your projected interest rate for your new loan, and the desired repayment period (in months).

3. Apply: Now that you know what you want, it is time to apply for a consolidation loan. For federal loans, you will want to apply through any of the federal government's Department of Education websites. If you currently have private student loans, you will want to find a student loan consolidation company that meets your needs.

Consolidating default student loans is a smart way to get yourself out of an uncomfortable situation that could only get worse as time passes. Follow these 3 steps to get on the path of loan consolidation and on to a better future.

Consolidate Student Loans The Best Way to Pay Them Off May Be Debt Consolidation

Consolidate Student Loans - The Best Way to Pay Them Off May Be Debt Consolidation

If you have recently graduated from college you will most definitely want to consolidate student loans. It can be very overwhelming to receive multiple loan payments every month. Your loans will generally all have different interest rates and terms for repayment, making it even more confusing. You will find your loans much easier to manage when you consolidate student loans into one.

You may be wondering, how do I do this? It really is quite simple. For starters if you have federal student loans you will want to consolidate your loans through the Department of Education. They offer a debt consolidation program funded by the government.

Their program allows you to lock in a fixed interest rate and have one monthly affordable payment. You can also spread your payments out over a time frame of up to 30 years. You may even be eligible to defer them for 3 years before you start paying them back. All of these benefits are set in place to give you debt relief so that you are able to afford other living expenses that you will have. You will now be able to pay for rent, transportation and other necessities.

To consolidate student loans through this program you will need to fill out an application. Applications are available on line. You will need to make sure all the loans you are consolidating are federal loans, for example Perkins and Stafford Loans. To be eligible you must have graduated and make sure your loans are in current standings. You however, do not need to be employed. You also do not need to find a co-signer for the loan or have collateral to back it up. In the future if you decide to go back to school you will also be eligible for deferment. Finally, you can pay your loan back early without any penalties.

As you can see the best way to pay off your student loans is through consolidation. When you consolidate student loans you not only relieve the burden of having to make multiple payments each month, but you will also relieve some of your financial

Consolidate Private Student Loans

Just to let you know, you are not the only graduate who has to deal with multiple private student loans. It is difficult to manage your financial condition with multiple loans on your back and other expenses to take care of. How can you remedy the situation? Have you ever thought of going to consolidate your private student loans?

When you are doing so, there are 3 things you need to look out for.

1. Loan consolidator

Unlike federal student loan consolidation, private loan consolidators charge various interest rates for your loans. The interest rate charged is according to the market rate. So, when the market rate is low, you can enjoy low interest rate. But when the market rate shoots up to the maximum cap, you will have to bear the burden.

And to get your business, different loan consolidators will offer different benefits when you consolidate your student loans with them. Some of them may offer higher interest rate but they might offer lucrative packages that can benefit you in the long run and vice versa. So, you have to look into your need before you talk to the loan consolidators.

Lastly, you have to be extra careful when you are applying for online private student loan consolidation. This is because there are a lot of agencies which claim to consolidate your loans are actually referring your loans to firms that really consolidate student loans. You can actually get better interest rate when you deal directly with the responsible firms.

2. Extra cost and penalties

When you are consolidating your private student loan, you will also want to be clear of the extra cost that is involve in your consolidated loan. Some loan consolidators might charge you for an application fee and some might charge you processing fee for credit history check.

And to let you know, many loan consolidators are withdrawing their pre-payment penalty (penalty that you need to pay when you settle your loan before the agreed loan period). So, be sure that you ask the loan consolidators about this and if they are unwilling to withdraw this for you, you can always look for another loan agency.

Although you can enjoy incentive with on-time payment, what if you are late with your monthly payment? How much penalties are they going to charge you? You have to be clear on every detail of your loan consolidation.

3. Promotions

And since the loan consolidators are competing for your business, it is common that they will run promotions once in a while to draw in new business. So, when you are talking to the loan agencies, remember to ask them about the promotions. It will be good to have some incentive to lighten your burden.

Sometime the loan agency will not inform you about the promotions. After all, they are affecting their profit when they run the promotions. So, you have to take the initiative and keep yourself update so that you can get on the boat before the expiry date.

Consolidate Private Student Loans What Are the Best Options

Consolidate Private Student Loans - What Are the Best Options

As you get closer to graduating from college, you may be wondering what you are going to do with those private student loans that you have. Perhaps you've been receiving consolidation materials but you aren't quite sure what the best options are. Well, here is a look at how these loans usually work and the best options that you have available to you when it comes to consolidation.

First of all, you may have some deferment time on those loans. There are two different types of deferments available on private student loans. There is regular deferment when your loans continue to accrue some interest, but you don't have to make any payments. If you need to get your finances all figured out, this can be very helpful. Usually you can get this type of deferment for some period of time after you graduate from college.

The other type of deferment is known as educational deferment. This means that if you go back to school and you are attending college at least part time, you don't have to pay on your loan. While many private loans offer educational deferment, not all do, so you should check to find out the deferment terms of your own lenders.

After you graduate from college, you may have the ability to consolidate those private loans. This allows you to consolidate them into one large loan that has the same interest rate and only one payment to worry about. In some cases you may be able to consolidate with a lender you already have. However, you may want to consider other private lenders as well for consolidation, looking for the best terms and rates on those loans.

Advantages and Disadvantages of Student Loan Consolidation

Are you currently facing problems on how to pay the various student loans you have incurred while still in college?

As fresh graduates, it is not surprising that you are currently in this predicament because of the various financial obligations you have taken upon yourself while earning a higher form of education. A college education is quite expensive these days and the only way for one to cope is to take advantage of the different student loans available. The two types of federal student loans are the subsidized and the non-subsidized loan. Other than this, students can also take advantage of private loans offered by banks and other private lending institutions. If you have taken several loans the whole time you were in college, it is inevitable by the time you finish school you will be deep in student debts. This is the reason why some people would advise you to consolidate your loans as a solution to your problems. However before you can decide if this is the best course to take, it is best to study the advantages and disadvantages of consolidating student loans.

Advantages:

1. Consolidating all your multiple loans into one will take away the pressure of having to pay several bills. You only have to concentrate on one loan, one interest rate and one bill each month. 2. You can opt for a longer repayment period. Usually a student debt is payable within 10 years but with student loan consolidation, it can be extended up to thirty years. 3. With a longer repayment period, it also means paying a smaller monthly payment. This would give you extra spending cash in your pocket. 4. There are no other extra fees charged when you consolidate your loans. 5. There is no penalty if you choose to pay off your debt early. 6. No credit check is required when you apply for a student loan consolidation.

Disadvantages:

1. If you choose a longer repayment period, the total amount you will be paying in the long run will end up much more than the original loan amount. 2. Once you consolidate your loans, borrower's benefits like interest rates discounts and rebates will no longer be available. 3. If you decide to consolidate your loans within the 6-months grace period, your loan payment will start immediately. 4. It may be possible that your consolidation interest rate will come out higher than the existing rate of your current individual loans. 5. You can consolidate your various loans only once.

It is very difficult focusing on your career if you are burdened with so much financial problems. Knowing the different advantages and disadvantages of student loan consolidation is very important as it can help you decide what the next step to take is.

A Student's Guide To Direct Loan Consolidation

Direct loan consolidation is a program that helps you to manage your student loans. The US Department of Education's Federal Direct Loan Consolidation program allows you to consolidate your student loans into one new loan. The types of student loans you can consolidate among others are Federal Stafford Loans, Federal Perkins Loans, Direct PLUS Loans, and almost all other federal student financial aid programs. The result of this is reduced monthly repayment, extended repayment period and, although not always, lower interest rate.

As various financial aid programs may have different interest rates, the consolidation overcomes this by setting a fixed interest. The interest is determined based on the average of your combined loan interests. The consolidation interest ranges from 0.125% to 8.25%. The average of your combined interest will be rounded up to the nearest 0.125% of a whole 1% (e.g. an average interest of 4.111% will be rounded up to 4.125%). With this calculation, you might end up with a slightly lower or higher interest. A lender sometimes gives dispensations for students by giving lower interest rate or other reduction. You can consult your lender about the possibility of getting this dispensation.

With direct loan consolidation, you can extend your repayment period, resulting in lower monthly repayments. You can extend the period from the standard 10 years to 12-30 years, depending on the amount of your consolidation. Nevertheless, longer repayment period also means higher interest. To deal with this, you can increase your repayment or prepay the debt once your financial condition is recovered.

To apply for a consolidation program, your loans must be in the grace or repayment periods. A grace period is the amount of time during which you are not obliged to make repayments, which usually lasts for 6 or 9 months. Note that once the consolidation process is completed, your grace period will automatically end. So if you want to benefit from you grace period, you can delay the consolidation process until near the end of the grace period.

If you apply for the program during the repayment period, you should continue repaying the loans you want to consolidate. A step-by-step consolidation process can take around 30 to 45 days. When the consolidation process finishes, you are given 180 days to add any loans you might forget to enlist into the loan consolidation.

If you encounter problems repaying your loan, you can contact your lender to grant you a deferment or forbearance. A deferment is a period of time during which your lender allows temporary suspension of payments on your loans, while forbearance is a period of time during which your lender temporarily reduces your monthly payment amount.