Posts Tagged ‘consolidation’

Consolidation Loan Student Programs: Bringing Your Debt Under Control

If you are like many students and recent graduates, you very well have amassed a great deal of student loan debt.  In this regard, you may be looking for ways in which you can bring your outstanding student loan balance under control.  You might want to consider the various consolidation loan student availabilities that you can take advantaged of in this day and age.  Through consolidation loan student opportunities, you can take an affirmative step towards brining your outstanding student loan debt under control.

There are a number of benefits to availing yourself of what is available in the way of consolidation loan student availabilities.  The primary benefit that you can obtain through utilizing and taking advantage of consolidation loan student opportunities is a savings in the amount of interest you have been paying on multiple student loans.  As a general rule, consolidation loan student programs offer interest rates at a level under what you normally have been paying on your multiple outstanding student loans.

One of the other significant benefits of a consolidation loan student program is found in the fact that you will be able to relieve yourself of recurring late fees and related delinquent charges that you may be encountering in regard to outstanding student loans.  If you are like many people who have racked up student loans, you very well may be facing ever increasing late fees and the like over time.  Again, through consolidation loan student programs, you can rid yourself of the burdens of late fees and other charges.

An added benefit of taking advantage of a consolidation loan student program is found in the simple fact of convenience.  If you have acquired a number of different student loans, you find yourself juggling multiple payments each and every month.  This can be time consuming and even confusing in some instances.  With the implementation of a consolidation loan student plan or scheme, you will only have to make one monthly payment, easing the burden of keeping track of a multitude of payments each and every month.

There are a number of different financial institutions that now offer consolidation loan student programs.  There are companies that specialize specifically in offering people consolidation loan student opportunities.  In addition to the companies that specialize in consolidation loan student programs, many traditional lenders (such as banks and savings and loans) now have implemented special consolidation loan student programs for students and graduates.  Therefore, you have a variety of sources for a consolidation loan student program to chose from in this day and age.

By taking the time to shop around and consider different consolidation loan student availabilities you will be able to find a consolidation loan student program that best meets your needs and obligations.  Through research and a bit of proverbial homework you will be well on your way to brining your student loan debt well under control, to bringing your financial house into order now and well into the future.  Rather than continually paying for your education, you will make your education pay for you.

What you Need to Know about Consolidating Student Loans

Chances are if you’ve taken out student loans in order to finance your education you have been, or at least will be, receiving calls and offers in the mail to consolidate your student loans. There are actually numerous advantages to consolidating your student loans. In addition to gaining a fixed interest rate you can also potentially lower your monthly payments. In the event that you begin to experience financial difficulties, you may also be able to take advantage of flexible payment options with a consolidated student loan.

Unlike other types of debt consolidation programs a student loan consolidation gives you the opportunity to combine your loans into one package with more attractive terms. You also don’t have to worry about being turned down because of a bad credit score and the interest on the loan may be tax deductible. In addition, in the event of your death your survivors won’t have to worry about paying it back because the debt will be discharged.

If you have a variable interest rate student loan, consolidating the loan can also help you to lock in a lower rate before the rates increase the next year. Over the length of the loan, this one step can actually help to save you a tremendous amount of money.

Of course, in addition to the advantages there are also some disadvantages of which you should be aware. One of the most important is that if you end up lowering your monthly payment you are actually extending the length of the loan and that means you’ll pay more over the life of the loan due to increased interest. You can still take advantage of the other benefits of a student loan consolidation without this disadvantage; however. Just don’t lower your payments unless it is really necessary.

When considering lenders for a student loan consolidation it is important that you always compare the terms of each offer made to you. Consider the interest rate and length of the repayment terms to be sure you are getting the best deal possible.

If you have a mix of both federal and private student loans, you should also be aware that while both types of loans are available to be consolidated it may not be a good idea to consolidate your federal loans and private loans together in the same package. There are stipulations on private loans that are not required on federal student loans, such as no deferments, no tax deductions on the interest, no forgiveness of the debt in the event of death and no forgiveness of the loan for working in certain fields. In the event of a mix of private and federal, it’s usually best to go ahead and consolidate the private loans separately from the federal loans so that you can retain those advantages for the federal loans.

By understanding all of the factors related to student loan consolidation you will be in a better position to make a more informed decision regarding your finances.

When Should You Consolidate Student Loans?

If you have just graduated from college, the likelihood is that you are under a large amount of debt in the form of student loans.  You might be wondering if there is any way to reduce the amount you have to pay.  One solution for reducing your debt is to consolidate your student loans.  Student loan consolidation is similar to refinancing a house on better terms:   although the principal of the loan will not be affected, the interest rates you can lock in when you consolidate student loans to a fixed rate can be substantially better, reducing your monthly payments by up to forty percent.  Plus, you might be able to stretch out your payment time to reduce your monthly payment amount even further.

The disadvantage when you consolidate student loans during your initial six-month grace period is that you must start making your payments right away.  This can be difficult if you have not found a job after graduation, although you can wait until just before the grace period ends to consolidate, and still receive the lower rates.  Furthermore, once you have consolidated your student loans, you cannot un-consolidate them again, so make sure to consider your choice carefully.

How is Interest Calculated When I Consolidate Student Loans?
When you consolidate student loans, your lending company pays off your government loan and issues you a new loan under its own name.  The typical way to determine the interest rate on the new loan is to take the average interest rates on all of the student loans, and offer a new rate that is an eighth of a percentage point higher (up to a maximum interest rate of 8.25%).  Although agreeing to a higher interest rate might not sound like a good reason to consolidate student loans, this rate is fixed over the life of the loan, whereas the government rates will fluctuate.  Since rates are at an all time low right now, locking in the current rates might be a good idea.  Furthermore, many banks give you ways to bring down the percentage rates.  For example, some lending institutions will drop the rate by as much as a quarter point if you agree to automatic deductions from a checking or savings account, whereas others drop the rates after a certain number of timely payments.  As an additional bonus, there is no penalty for paying off your consolidated loan early.

When Would You *Not* Want to Consolidate Student Loans?
Before you decide to consolidate student loans, you should carefully consider your alternatives.  For example, did you realize that it might be possible to have your student loan cancelled altogether?  Student loan forgiveness options include volunteering, for the Peace Corps for example, or working for the government in a low-income area as a teacher or doctor.  Cancellation is not possible, however, after you have consolidated your student loans.  If this kind of work interests you and is available, it could be a better option than loan consolidation.

Another time to hesitate before you choose to consolidate student loans is when you are close to finishing your payments.  Stepping up the payments and saving yourself some interest and the hassle of consolidation might be more advantageous to you.  

Finally, there are loans that you might want to keep open because they offer special advantages.  For example, if you are considering going back to school and you have a Perkins loan, you would not want to consolidate that with your other student loans.  The government will pay all interest on Perkins loans while you are in school, but if you have chosen to consolidate student loans, you will not be able to receive this benefit.  You could always choose to leave any special kinds of loans out of the consolidation mix, however.

Types Of Federal Student Loan Consolidaion

If you are an American student or one studying in a U.S. citizen school, then you are entitled for federal student loan consolidation from the U.S government.

Federal student loan consolidation plans are applicable for all students whether you are still in college or a recent graduate or already into your new career.

If you are successful in your student loan consolidation application, it will help you to reduce the student loan payment amount every month and/or allows you more time to compensate your loans as a student.

If you currently have several student loans, it is simpler if you use federal student loan consolidation to consolidate them into one loan payment thus making it simpler to manage.

The Four Types Of Federal Student Loan Consolidation

The U.S government in a bid to attract more students to require their student consolidation loans have come up with four plans to suit the different needs of students.


1) Standard Student Loan Consolidation

The most student loan period is 10 years and the payment amount every month is fixed. This sort of plan is suitable for students who are able to afford to pay a fixed amount each month. The monthly interest wouldn’t be a big aspect in huge student consolidation loans

2) Extended Payment Plan

This sort of plan is identical to standard student loan consolidation other than it has a longer repayment period of between 15 to 30 years. The repayment period is subject to the student loan amount.

3) Graduated Payment Plan

This sort of plan is worthwhile for students still schooling and can only repay the student loan when they have a job after they graduated. The payment period is between 15 to 30 years. The payment amount each month usually starts low and increase steadily every 2 years. The intent is the as the student has worked for a longer time of time, their salary will increase accordingly and therefore able to pay a larger repayment student loan.

4) Income Contingent Payment Plan

This kind of plan is complex and is founded on the student’s income over a time of years. It is also dependent on the family’s annual gross income, other loan amounts owed, other assets, mortgages etc.

Most student usually choose graduated payment plan or the extended payment plan for their federal student loan consolidation.

Painless Strategies Of Paying Off A Student Loan

Graduation day is over; degree in hand, the chilling reality of your student loan is looming large. You do not start repaying you loan until 6 months after graduation. When loan repayment begins, you have to pay at least $50 a month until your entire student loan and interest is paid off.

It makes sense to repay the loan amount early, so that you trim the interest, which will continue building on your loan. Financial planners recommend that you pay the minimum balance on your student loan and try to save as much as you can for retirement. In any given month, you can opt to pay off more than your monthly requirement without penalty.

There are mainly four options of repayment which you can choose from. If you land up with a good job once out of college, and can afford to make steep monthly payments, go with the standard payment schedule. Under this option, you can pay off your debt within 10 years with the best interest rate. It’s the quickest way to pay off your loans. However, it requires high monthly payments.

Graduated payment is an option if you expect to make a modest but steadily increasing wage. The payment requirements will start off gentle, and will gradually increase every couple of years for the next 10 to 30 years.

If you’re in a commission-based or seasonal business, your income will vary accordingly. In this case, your monthly payment bill will be proportional to the amount you are currently making. You get a levy of get up to 15 years to pay it all off your student loan.

With a long-term payment option you’ll be allowed to pay the least possible amount per month for 10 to 30 years. That however means that in 30 years you may have paid double the original amount of your loan. You have the flexibility of choosing to switch from one payment option to another, depending on your financial status.

However, if you find that you simply can’t keep making monthly payments, no matter how small, you can choose to defer your loans. This means that for an amount of time that’s negotiated between you and your lender, you won’t pay any amount towards the loan. Interest, however, will continue to accrue, unless your loan subsidized.

Everyone is not qualified for loan deferment, unless you can prove that you are trapped in financial difficulty. Unlike deferment, forbearance gives you a shorter three-month break from your loan repayment. Your however may not grant you forbearance, unless he finds your request reasonable.

Student loan consolidation is another well-trodden path chosen by graduates each year. It allows you to put together your separate student loans into one big loan. This is a saviour when you can’t afford to shell out a large sum each month.

Debt consolidation will bundle your student loans into one, with a single loan amount which will be much lesser than paying multiple loans. Some also choose consolidation because it’s easier to keep track of the bill.

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