If going to college were cheap, there would be no articles like this. But if so, then this must be a perfect world. Sadly, though, it is not. However, there are three options available to students for funding their college education. One option is to apply for their school’s financial aid. They can also choose to apply for loans.Students can easily qualify for unsecured student loans. These loans have relatively flexible qualification requirements. You do not have to jump through hoops to get them. Do not worry about not having a strong credit score. These loans do not require them. Most of these loans also do not require you to make a deposit upfront nor charge you with excessive fees.There are many ways of using unsecured student loans to your advantage. You can use them to purchase your books and necessary equipment, like a computer system. You can also use them to pay for transportation costs or for car repairs. But if you have already accumulated some credit card debts, it is wise to use your money to pay off these debts first. Credit card debts are very expensive, and before you know it, they will become difficult to manage.Student loans have a wide range of repayment periods. You can choose to repay your loan from within 60 months to within 30 years. It all depends on the amount borrowed and the terms of the loan agreement.On the down side, unsecured student loans tend to have higher interest rates compared to secured loans and typical personal loans. Unlike secured loans, unsecured student loans do not require any security. For this reason, lenders consider them risky and charge a correspondingly higher interest rate.These can significantly help students earn their college degree. The interest rate maybe a bit high, but you can always repay it many times over once you get a high paying job after earning your degree.
The federal consolidated student loans offer a great help, especially if a graduate has not received job within 6 months after the graduation.On the other hand, if he has got the work, he may not have a need for the refinancing consolidated student loans and he will pay the debt quicker. However, he should look at the interest rates, because when he has agreed the debt during the student phase, his credit score must have improved.More and more graduates see it impossible to pay the student debts, because they are unemployed or underemployed. Stats tell that around 80 % were unemployed after graduation.1.The Benefits Of The Federal Consolidated Student Loans.Usually the monthly payments of the federal consolidated loans are lower than those of the separate debts. The interest rate is fixed and can be maximum 8.25 %. The pre-payment penalties are not paid and there is no application fees. The maximum payment times are from 10 to 30 years depending on the amount of the separate loans.2. The Loans Consolidation Gives A Boost For The Credit Score.When a graduate has done the consolidated loan agreement, the old loans will be paid away and what happens? The credit score will improve immediately, because the many old loans are reported as paid.3. Refinancing Consolidated Loans.Can private loans consolidated? Not with the federal ones, because they have special benefits. The consolidation gives only the benefit to make the management easier, because the private loan consolidation cannot compete with the price.But because in the private debt consolidation the interest rate is based on your credit score, you may get cheaper debt, if the credit score has improved after you got the first debt. Especially if you now have a good job, your credit score has jumped and that makes the loan cheaper.4. Pay Your Debt Away With The Home Equity Loan.It does not matter, how your debts are called, they have one common feature, they must be paid. If your home equity loan has lower interest rate than your studying debts have, you can pay your studying debts away with the home equity debt and thus get the lower interest rate.When you talk with the lender, it is crucial to ask about all fees and charges, because they can have some influence on the price of the loan.The origination fees, the pre-payment fees and the interest rates.
But how a graduate will know, what are his costs during the coming years, if he has not got any work? Good question, but the student loan consolidation has to be made during the grace period, i.e. during 6 months after the graduation.A borrower can solve this problem by taking as long payment time as possible with the lowest possible interest rate. Later he can decide, if he wants to pay the loan sooner, because in most cases it is possible.1. 4 Key Questions.When you negotiate about the student loan consolidation, you can keep these four questions in your mind. Is there any origination fees, what is the interest rate, how long is the payment time and is there any pre-payment penalties?2. Is Longer Payment Time Reasonable?I understand if you think, that the longest possible payment time is the best one, but think a little bit more. The longer payment time means, that you will pay more, because the amount of the interests will be bigger. But as said, you can decide this later after you have got the touch about your monthly expenses.3. Can You Get Money Cheaper?As a graduate you have not so strong positions in the loan talks, but they are still stronger than what you had, when you were a student. It helps, if you have taken care of your payments and your credit score has improved. But in most cases during the student loan consolidation, the credit score is better, which means lower interest rates.4. What About Your Parents Student Loans?Good question, because the parents can also have needs for lower monthly payments. Yes, they can also consolidate student loans, which they have taken for their children. However, they have to do the consolidation separately, i.e. a graduate and his parents cannot put their loans into one loan.5. Can You Pay Sooner?In most cases yes. If you remember one of the four important questions was the allowance for the pre-payments without penalties. This is quite important thing, because it allows the earlier payments and make the decision making easier during the pondering process.One potential benefit is the removal of the co-signer. This will save the parents or a relative from the future liability. This is possible after 24 to 48 months of making regular payments.