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Is A Student Loan Consolidation Or Federal Student Loan Consolidation Right For You?
Copyright 2005 Dean Shainin
With the cost of education going through the roof, going to
college can be very costly. Many students don't have thousands
of dollars to pay their way through college. This is why so many
college students use student loans and federal student loans to
get themselves through college. When it comes time to pay back
their student loans, it can be a real burden and a distraction
from their career.
Today's career minded students can get help with the burden of
having several student loans. One can focus on their chosen
career, instead of losing sleep over paying several monthly
student loan payments. Student loan consolidation and federal
student loan consolidation can be the solution with several
benefits.
How Does Student Loan Consolidation Work?
Here is typically how a student consolidation loan works. When a
student first applied for several loans from several different
agencies and student loan providers, they each gave a different
interest rate and term for paying back the loans.
The idea of student loan consolidation, is to take all the
different student loans and put them into one easy convenient
loan. You then only have to make one monthly loan payment every
month, instead of several loan payments every month over time.
This saves the student both time and money. Having a lower
interest rate and less checks to write every month are a couple
of the many bebefits of doing a student loan consolidation or
federal student loan consolidation.
What About Federal Student Loan Consolidation?
There are several advantages when you get a federal student loan
consolidation. You can take advantage of fixed interest rates,
lower monthly payments, one payment each month, get payment
incentives and new or renewed deferments.
There is usually not a minimum loan balance required with this
type of loan program. Also, you have the option of which loans
you may want to include and money saving payment incentive plans
with some federal student loan consolidation programs.
Another benefit is that you can consolidate your undergraduate
loans if you are still in graduate school. You can decide on
what loans you want to consolidate from the loans that qualify.
However, federal student consolidation loans can't include loans
you may have received from banks, credit unions, personal loans,
consumer debt loans or any other type of financial service loans
you may have applied for in the past. They have to be federal
student loans to qualify.
8 Helpful Benefits From Student Loan Consolidation
1. Lower Monthly Payments. Depending on your student loan
situation and the type of lender you choose, you may be able to
lower your monthly payments by up to 50%
2. Having Simple Loan Payments. By consolidating your student
loans, you only have one loan payment per month and one check to
write. This is very beneficial if you are writing several checks
every month to multiple lenders.
3. Having Fixed Interest Rates. With some federal consolidation
loans you can have a fixed rate for the life of your student
loan. It's best to do research to see what the best interest
rates and term you are eligible for. You can check online to
calculate the interest rate on a new student consolidation loan
based on the rates of your current student loans. You can then
round up to the nearest 1/8th of a percent of the weighted
average of the interest rates on your eligible student loans.
4. 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.
5. In School Consolidation Programs. While still in school,
eligible students can lock in a low rate. This would put you
into repayment status, but since you are still in school, you
are automatically put into deferment. The drawback of
consolidating your loans while in school, is that you lose your
6 month grace period. The solution to this would be to request
forbearance for up to 1 year on your student loan consolidation.
Here again you can do some research and get more information
online.
6. Lower Interest Rate. Student loan consolidation can save you
thousands of dollars. You may be using credit cards with 12% to
28% interest trying to keep up with your bills. This can cost
you thousands of dollars when you pay the minimum monthly
payments on high interest credit card debt. Having a student
loan consolidation may be your best option if you can get lower
interest rates when consolidating your student loans.
7. New Interest Rates. With a new student loan consolidation,
you may be able to get a much better interest rate. Interest
rates are now at an all time low. You may have been paying on
debt you built up from several years ago, at high interest
rates. Things change over time in the financial industry.
8. Help Relieve Stress. With a student loan consolidation you
don't have to worry about several monthly loan payments and due
dates. This in itself, can make a student loan consolidation
worth your while. You can focus on your new career, instead of
those nagging loan payments every month.
Student Loan Consolidation Services And Resources Online To Help
You
You can get a student loan consolidation online quickly and
easily. The Internet makes research and finding good
consolidation loan programs. You can get done in a day, what
used to take several weeks. You can learn everything you need to
know from information sites that provide the latest news,
resources, tools and data in regards to student loan
consolidation and federal student loan consolidation.
With knowledge you can be empowered to get the best type of
program for student loan consolidation. You can get loan quotes,
rates and compare loan companies that are competing for your
business.
About the author:
Dean Shainin is a consultant specializing in student loan
consolidation. Get valuable resources, tools, information and
more articles on student loan consolidation, visit this site: http://www.studentloanconsolidationtips.com
target=_blank>Student Loan Consolidation Program
Written by: Dean Shainin
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