A student loan is a type of loan that students can avail of to help them in spending money on their professional education. Student loans are guaranteed by the federal government and typically have lower interest rates than other types of loans.
Sometimes, one loan is not enough to finance all your educational expenses, including tuition, books and school supplies. This could force you to borrow several student loans from various lenders, which can be quite confusing and even more costly. To prevent this, you should consider student loan consolidation.
WHAT IS STUDENT LOAN CONSOLIDATION
Student Loan Consolidation is the process of combining all your student loans into a single new loan with 1 repayment plan issued by one lender. The balances from all of your previous student loans are paid off by the brand new loan. This allows you to pay only one loan rather than multiple loans.
The interest rate for the consolidated student education loans is computed by averaging the interest rates of your present loans.
You can also consolidate your student loans using the loans of another person, such as your spouse. Nevertheless, this is not advisable. This is because if you'll need deferment, both of you have to meet the required criteria. Also, you will still have to repay the loan even though you separate or divorce.
Most federal loans, such as FFELP as well as FISL loans, can be consolidated. Some private loans may also be consolidated. Various banks and student loan lenders typically provide loan consolidation options. You can also go directly towards the Department of Education to consolidate. Both students and their own parents can avail of loan consolidation.
ADVANTAGES OF LOAN CONSOLIDATION
Aside from simplifying your payment responsibilities, another benefit of student loan consolidation is that you can to decide on the structure of your loan. Usually, consolidated student loans require smaller monthly payments than the initial loans. If you're having trouble making your monthly obligations, then this option may just be for you. You may also convert your variable interest rate to a lower set rate, which can save you a lot of cash. You can also extend your repayment term from the standard 10 years for federal loans to are as long as 30 years. There is no maximum amount that you are able to consolidate, and interest you pay may be tax insurance deductible. Consolidated student loans also have flexible repayment options, such as no prepayment penalties, allowing you to pay more than your monthly obligations.
DISADVANTAGES OF CONSOLIDATION
Of course, there are also disadvantages to consolidating your student education loans. By lowering your monthly payments, you will have to increase the repayment period, which, in the end, can lead to more interest. However, since there are no prepayment fees and penalties, you can pay more than the required payments to be able to repay the loan faster. Another disadvantage to consolidation is that when the student loans have been consolidated, you may not individual them again. You may end up losing benefits, for example loan deferment. You can also only consolidate once. Therefore, it is essential that you research thoroughly for the very best consolidation options before going through with the process.
AM I ENTITLED TO CONSOLIDATION?
There are certain criteria you have to meet before you consolidate your student loans. For federal student loan consolidation, you can only consolidate if your current loans add up to more than $10, 000. You must be within your 6-month loan grace period after graduation or you ought to have already started repaying your loans. In order to meet the requirements, you also should have no previous record of mortgage consolidation. If you've gone back to school after your own initial consolidation, then you are still eligible for a brand new one.
WHEN SHOULD I CONSOLIDATE?
Once you have started repayment or you're within the grace period, you can already consolidate your student education loans. It is advisable to consolidate during the grace time period, since this usually results in a lower interest price.
HOW TO CONSOLIDATE
If you've decided to consolidate all or a number of your existing student loans, the first thing you need to do is look for a bank or lender with the best bargain. Student loan consolidation plans have different interest rates, costs for late payments and repayment terms. There are web sites, such as FinAid, that can provide you with a summary of lenders and their offers. Some websites can also assist you to arrange the consolidation. You can also consult a qualified loan counselor that will help you determine whether consolidating your loans will truly be good for you or not. They can help you in calculating the costs of your existing loans and compare it with the price of the single consolidated loan. They can also explain for you your other options, such as income contingent payments, prolonged repayment and graduated repayment. By doing this, you could make an informed decision regarding student loan consolidation, and save a large amount of money in the long run.
Sometimes, one loan is not enough to finance all your educational expenses, including tuition, books and school supplies. This could force you to borrow several student loans from various lenders, which can be quite confusing and even more costly. To prevent this, you should consider student loan consolidation.
WHAT IS STUDENT LOAN CONSOLIDATION
Student Loan Consolidation is the process of combining all your student loans into a single new loan with 1 repayment plan issued by one lender. The balances from all of your previous student loans are paid off by the brand new loan. This allows you to pay only one loan rather than multiple loans.
The interest rate for the consolidated student education loans is computed by averaging the interest rates of your present loans.
You can also consolidate your student loans using the loans of another person, such as your spouse. Nevertheless, this is not advisable. This is because if you'll need deferment, both of you have to meet the required criteria. Also, you will still have to repay the loan even though you separate or divorce.
Most federal loans, such as FFELP as well as FISL loans, can be consolidated. Some private loans may also be consolidated. Various banks and student loan lenders typically provide loan consolidation options. You can also go directly towards the Department of Education to consolidate. Both students and their own parents can avail of loan consolidation.
ADVANTAGES OF LOAN CONSOLIDATION
Aside from simplifying your payment responsibilities, another benefit of student loan consolidation is that you can to decide on the structure of your loan. Usually, consolidated student loans require smaller monthly payments than the initial loans. If you're having trouble making your monthly obligations, then this option may just be for you. You may also convert your variable interest rate to a lower set rate, which can save you a lot of cash. You can also extend your repayment term from the standard 10 years for federal loans to are as long as 30 years. There is no maximum amount that you are able to consolidate, and interest you pay may be tax insurance deductible. Consolidated student loans also have flexible repayment options, such as no prepayment penalties, allowing you to pay more than your monthly obligations.
DISADVANTAGES OF CONSOLIDATION
Of course, there are also disadvantages to consolidating your student education loans. By lowering your monthly payments, you will have to increase the repayment period, which, in the end, can lead to more interest. However, since there are no prepayment fees and penalties, you can pay more than the required payments to be able to repay the loan faster. Another disadvantage to consolidation is that when the student loans have been consolidated, you may not individual them again. You may end up losing benefits, for example loan deferment. You can also only consolidate once. Therefore, it is essential that you research thoroughly for the very best consolidation options before going through with the process.
AM I ENTITLED TO CONSOLIDATION?
There are certain criteria you have to meet before you consolidate your student loans. For federal student loan consolidation, you can only consolidate if your current loans add up to more than $10, 000. You must be within your 6-month loan grace period after graduation or you ought to have already started repaying your loans. In order to meet the requirements, you also should have no previous record of mortgage consolidation. If you've gone back to school after your own initial consolidation, then you are still eligible for a brand new one.
WHEN SHOULD I CONSOLIDATE?
Once you have started repayment or you're within the grace period, you can already consolidate your student education loans. It is advisable to consolidate during the grace time period, since this usually results in a lower interest price.
HOW TO CONSOLIDATE
If you've decided to consolidate all or a number of your existing student loans, the first thing you need to do is look for a bank or lender with the best bargain. Student loan consolidation plans have different interest rates, costs for late payments and repayment terms. There are web sites, such as FinAid, that can provide you with a summary of lenders and their offers. Some websites can also assist you to arrange the consolidation. You can also consult a qualified loan counselor that will help you determine whether consolidating your loans will truly be good for you or not. They can help you in calculating the costs of your existing loans and compare it with the price of the single consolidated loan. They can also explain for you your other options, such as income contingent payments, prolonged repayment and graduated repayment. By doing this, you could make an informed decision regarding student loan consolidation, and save a large amount of money in the long run.
