Student Loan Consolidation Explained

Student loan consolidation means paying off or refinancing multiple loans with one new loan. To place it in simpler terms, student loan consolidation is gathering all your debts from various creditors and then tying them together under one, single creditor. It is just a matter of taking one big loan to pay off the other smaller loans. In return for this service, the consolidator sets the interest rate of the consolidated loan based on existing legal parameters.

Student loan consolidation is not much more different than credit card debt consolidation or any other debt consolidation activity. As a matter of fact, it means the same thing. For people with multiple credit cards, they simply consolidate all their credit under one credit card. This makes keeping track of payments easier. At the same time, creditors eagerly welcome your business by offering lower than average interest rates and free sign-ups.

In the internet alone, there are hundreds of businesses that specifically offer student loan consolidation. Open up another browser to take a look at some of their websites. These companies offer different interest rates. Some of them will offer free sign-ups while others will charge a minimal sign-up fee. Again, this is really no different from other loan consolidation programs. A loan is a loan whichever way you look at it.

Let's take a more detailed look at student loan consolidation. Interest rates for student loan consolidation stand at 3.2 to 4.5 percent on average. Some creditors may offer lower or higher rates than those mentioned here. Other creditors also offer a rebate of up to $1,800. Creditors also advertise a reduction of payments that range anywhere from fifty to sixty percent. A 1.75 percent total discount on federal rates after twenty four months for federal student loan consolidation is also being offered by another creditor.

The only significant difference between student loan consolidation and general credit consolidation is the fact that a student loan is guaranteed by the United States government. Interest rates are based on the 91-day Treasury bill rate established during the last day of auction in May of each year. A student may consolidate a loan once, and only once, with a private lender. Thereafter, any other consolidation is to be made direct with the Department of Education. If the loans being consolidated carry different interest rates, an average is computed to come up with the new rate. Re-consolidation does not change the interest rate of the previous consolidation. There are no fees for student loan consolidation. Instead, the government subsidizes the private lender for student loan fees.

Student loan consolidation is also a big help to a student's credit rating, assuming of course, that the student is responsible enough to keep up with payments. Usually, most federal student loan companies submit reports to credit bureaus. However, there some companies that do not submit reports. If you, as a student, would like to use your consolidated student loan as a basis for your future credit rating, it is highly suggested to select a creditor that submits credit reports to the credit bureaus. Having an existing credit record will be a big help in securing future credit when your schooling is done.

With all these details and selections to choose from, it sometimes becomes dangerous to actually apply for a student loan consolidation program. There are several websites than can be used as helpful references when it comes to choosing a legitimate creditor. A couple of these websites are http://www.product-reviews.org and http://www.consumer-protection-company.com.

Rebates and federal rate discounts aside, the real target of student loan consolidation, or any other debt consolidation program for that matter, is to lower the interest rates of the various, existing loans. The convenience of a single billing statement comes as a secondary benefit. Student loan consolidation is a great help if you are seriously considering taking charge of your time and finances. If anything else, it lessens the amount of worrying which translates to an ability to focus on more important academic activities.

by Ray Baker

Read more »

Private Student Loan Consolidation

Private student loan consolidation is a financial process that works in combining all your private student loans into a single new debt. Can you imagine that? Just a few days ago, you are in a nerve wracking situation because of the many loans that you need to attend to, all at once. Many loans equal many payments and these monthly dues are what make you crazy, for where are you to go? You have no available cash to pay any of these loans.

Single new loan means lesser stress and worries
However, thanks to private student loan consolidation, you now have to worry only with one loan. To illustrate clearly the difference, you have 6 private loans, all of which you have to shell out money for the payments, but then there's not enough cash in sight. Now you applied for consolidation - and the original 6 loans are turned into one. Now you have much less money to have in order to pay up this new loan.

One good feature of private student loan consolidation programs is that you may choose to extend your loan term to as long as 30 years. Why extend? This is done in order to stretch your monthly payments - in other words, you pay a much lower amount for your loan. What a great way to lessen the financial burden, and consequently the stresses and worries.

Benefits and financial advantages

Indeed, in summary, extension in the payment of monthly interests and decrease in the applicants' monthly payments are the many important benefits that a borrowing may experience when trying to obtain a private student loan consolidation program. These can never happen if you still have your multiple loans to individually take care of.

Choose only the best consolidation agent
Likewise, consolidation lending companies offer other enticing financing benefits such as the reduction in the rates of interests, especially if the borrower is able to set up some sort of monthly payment agreement with his. Options on the monthly repayment actually vary from one lending agent to another.

And so it is up to you to choose the lender that can offer you the best consolidation program. Make yourself a short list of lenders, and compare their offers, the benefits and their figures. Definitely checking each and everyone of them can be hard work, still it is the only way to know which lender can serve you best.

To learn so much more about private student loan consolidation, private and federal student loans and other related topics, visit our site at http://fussaboutloans.com/ where you can read interesting articles on these topics and much, much more.

by Ernesto Maitim

Read more »

Student Loan Relief Programs

Student loan payments do not have to be so budget draining when you use student loan relief programs to minimize the cost. One of the biggest hurdles with finding relief to federal programs is the time it takes to learn what is actually available according to your given situation.

One major difference in how much you could possibly save is determined by what company you hire for service. There are many companies that consolidate loans directly. In other words, the company will take your student loans, federal and private and combine them into one monthly student loan relief payment. The difference is that this consolidation format ends up adding cost to your already pricey loans. The interest rate and the stretched out term length only adds to the final cost. When you don't go directly to the source of the loan, you could be charged extra costs.

Going to the source of your loan can prove to be a frustrating journey. Waiting lengthy periods of time on hold does not fit into busy schedules. There are best student relief programs that provide the link debtors to the federal programs available for a small fee. They will deal with long waits on hold and searching through all programs concerning the given debt situation. Finding answers to all your questions is no longer a hassle.

*When can I consolidate my federal loans?

*Is there more than one repayment plan?

*What exactly is consolidation?

*Do I have to qualify for relief plans?

*What if I have defaulted on my loans?

*Does my income level make a difference?

Finding these and more answers can take up a chunk of your time when acting alone. A qualified company will look at these and other questions to determine what programs you qualify for.

When you have federal loans and you work in public service, you may qualify for loan forgiveness. Imagine having a portion of your loan forgiven and then possible consolidating them. Work with a company that can open not just your eyes to available programs but will also open your wallet to saving some cash in the long run.

The company you choose to work with will be the most important choice you have to make in finding relief. Once they have collected all of the pertinent information to do the research, you will know what you will qualify for in no time. Student loans do not have to be the financial burden for the long-term.

Whether you are looking for one low monthly payment, have your deferment time renewed, qualify for a forgiveness program or you need to change your repayment often, find a company who will do just that. Find a company that will work directly with the Department of Education in order to keep services affordable.

Every student loan case is different. There are new programs being offered as income-based relief programs. Federal student loans are very forgiving and more patient than other types of installment loans, but they will not go away. Do what you can to make these loans more affordable. Lower student loan relief payments when you hire a professional experienced company to make it work for your personal situation.

by Holly Petherbridge

Read more »

How To Pay Back The Student Loan Consolidation

Just to make it clear with you, your responsibilities don't stop when you have consolidated your student loans. In fact, you should start to look at how you should repay the consolidation to keep your credit score in good value. But besides being punctual with your payment, what else can you do to manage your consolidation?

1. Repayment plans

When you are consolidating your loan, remember to get more information from your consolidators about the different repayment plans they offer. Since not all repayment plans are made equal, you and the consolidator have to look into your portfolio to determine which is the best plan that suits you.

If you don't think that you can settle the loan within 10 years, then the simple repayment plan might not fit your need. If you have a family and you decided to extend your loan period, maybe you can look at the income contingent plan.

2. Talk to consolidators

If you run into any financial difficulty, you should talk to the loan consolidators as soon as possible. Maybe both of you can work out something so that you can still pay the student loan consolidation on time.

If it seems impossible to channel money to your loan, you will need to ask for deferment (postponement of repayment when you are going back to school or being unemployed) or forbearance (temporary suspension of repayment when you are sick or facing financial difficulty).

And no matter what you do, you should avoid getting your loan into default.

3. Watch your expenses

Even though you have consolidated your student loans and you are making single monthly payment, it doesn't mean that you can spend your money as you like. If you really look in the market, there are a lot of similar alternatives that you can choose from instead of buying the high end product.

Besides that, you will also want to watch your credit card spending. You don't want to upset your credit score with uncontrolled credit card usage.

By the way, there are more ways you can do to repay your student loan consolidation. All you need is a little bit of exploration and asking around.

by Michael W

Read more »