What is Student Loan Consolidation Program and How it Works?

It is common that students nowadays are taking more than one loans to further their studies in colleges or universities. And problems start to arise when you have to juggle between work and various payments to multiple loan agencies.Then you heard about student loan consolidation but what is it exactly?This is a simple loan repayment program where you combine all your outstanding student loans into one so that you only make one payment to a single loan agency every month. Let’s say you are holding 3 federal student loans and you are currently making 3 different payments with 3 different interest rates to 3 different loan agencies. By consolidating these 3 loans, it is seems that your outstanding loans are being paid off and you are now only require to focus in a single loan. This can significantly make your life easier.Currently, there are two student loan consolidation programs in the market and one of them is offered by the federal government and is known as the federal student loan consolidation. Some found that this program is more flexible because it requires less documentation and students are not subjected to credit check.The other loan consolidation program is offered by the private sectors like banks and credit unions hence it is called the private student loan consolidation program. Those who are not eligible for the federal government loan consolidation will most likely apply for this program.How does the student loan consolidation works?In order for this program to work, you will have to firstly file an application with your selected loan institution and wait for the approval. At the mean time, you can look into the different repayment plans offered by the institutions to see which plan you are most comfortable with.Before you sign the paper, make sure you understand and agree with all the terms and conditions. Remember to clarify with your loan agency if there is any hidden cost or extra fee involve. Surely you don’t want to find out last minute that you have to pay extra processing fee when you are close to paying up your loan. How about further discount or any incentive when you pay on time? You deserve to know.Once the paper has been signed, you should keep yourself update with the application status. This loan consolidation process should not take more than 180 days. If you didn’t receive any news until then, you will have to check with the loan agency to see what is the issue with your application. Should your application be decline, you will have to look for another loan agency.Once your application has been approved, the new loan agency will contact you for the good news and to discuss about the interest rate. It is possible to ask for better interest rate when you are consolidating your student loan with the private sectors but you might not enjoy the same privilege with the federal loan consolidation. This is because the interest rate offered by the federal government is fixed at the current low rate.

Student Loan Consolidations – Finding a Program That Works For You

Student loan consolidation help is a good solution to students who are in debt because of all of the loans that they needed in order to pay for school.Student loan consolidation is basically the combining of two or more student loans. The point behind this is to allow the student to pay only one low monthly payment, based on what they can afford. This allows people who are in a bad financial situation to live a little easier.If you just take a look around you can find hundreds of options for student loan consolidations, as well as other consolidations for other types of debt.Looking at student loan consolidations, you will find that there are two major types of student loan consolidations. They are the federal student loan consolidation and private student loan consolidations. Though you are able to combine federal loans with private loans it is a bad idea. When you combine the two different types, you lose all of the benefits that you are offered with federal student loans but can’t get from using private loans.First and foremost, with federal student loan consolidation the interest rates you pay can be tax deductible. That is a good benefit that you would have no chance at getting if you were to consolidate them with private loans, or if all you had were private loans.Next comes the possibility of being forgiven for certain federal loans when you go to consolidate them. Again, if you were to combine them with private loans, or if all you had were private loans, you would not have a chance at this.And finally, for some who might need this, there is a possibility for you to defer your payments if you need to go back to school. You again can’t take advantage of this benefit if you have just private student consolidations, nor if you mix private with federal student loans.If at all possible, you want to use only federal student loans. Remember that when you go to get student loans consolidated, you need to be sure to keep federal loans separate from private loans.When you decide on a student loan consolidation, you need to pay close attention to the interest rates they charge. If all of your rates are the same, then it will be slightly higher, but you will have no extra fees, and you will have a monthly price set based on what you can afford. If the rates are different then they will calculate an interest rate that will land somewhere between your highest rate and your lowest rate. When they tell you that your interest rate will be lower, it isn’t really true. It will just be lower than your current higher rate.If you come across a place that asks for an up-front fee then you should be wary. These are scams. That’s not to say that everything that has a fee is a scam, just the ones that ask for the fees in the very beginning.

Things You Need to Know About Federal Student Loans

Funding your education can be a daunting task for most of us. Unless you are born into a privileged family, finding money to further your academic goals may pose considerable challenge. One very popular way to fund your college education is by getting student loan. Yet with too many institutions offering loans of various kinds and with different rates, how do you select the best one for you? Why not consider Federal Student Loans?Getting to Know Federal Student Loans What are actually federal Student Loans? Federal Student Loans or Direct Loans are part of the federal student aid administered by the UDS Department of Education. These are special loans not offered via private lenders or companies but they are made in agreement between the student and the US Department of Education.Those who wish to apply for a Federal Student Loan must fill in a Free Application for Federal Student Aid (or FAFSA) which can be done via the Internet. Just include all the necessary documentations and information required. Additionally, students must complete a Master Promissory Note (or MPN) which is actually a legal document that explains the contract between the related parties. All the terms and conditions of the loan are stated in clear terms in MPN as well.Getting the LoanAfter successfully securing one of the loans, student may sign up and use the service center. By gaining access to this feature, they may view the loan amount and all related information. Plus, you may also opt to use the services of a counselor form a direct loan servicing site. .It is quite easy to qualify for the loan, you just have to be enrolled in a school that is eligible for the direct loan student loan. And you don’t have to be a full-time student either, you can ask for a Federal loan or direct loan even when you are on a studying part time basis.The Most Common Types of Federal LoansGenerally, there are two most common types of federal loan or also referred to as Direct Loans:- (i) The Subsidized Loan The Federal Subsidized Student Loan has an interest paid subsidy that it lightens the burden of the student to manage. Now, Students don’t have to worry about the interests as they are fully paid by the Government. That should be a reason to have greater peace of mind and to excel in the current academic pursuit. (ii) Unsubsidized Stafford LoanThese are meant for graduate student who have families of their own to support, or if they have no living parent to support them. These are loans with low interest. There is a limit you can get with these kinds of loan and students can expect around $8,000 in total amount.Federal Student Loans do have a fixed interest which is determined every July 1st. There is a minimum fee incurred, which can be set up to 4%, which is used to offset the cost of managing the services of these programs.

Advantages and Disadvantages of Governmental Student Loan Consolidation

When you decide to consolidate your governmental student loans, you have to take a notice of the advantages, but also of the disadvantages. Are you deciding to consolidate your loans, to make your monthly repayment process easier?First of all, it is nice to hear that you are trying to find the best way for yourself to repay your debts. However, you must ensure that your decision is right for your situation, because it will have a significant impact on your future.Here is a list of the benefits of a governmental student loan consolidation:1. It reduces your federal interest rate
2. Your repayment term can be extended
3. It has different payment plans: Standard, Advanced or Graduate
4. Instead of several loans, you will only repay a single loan
5. There is no fee to pay with a federal loan consolidation
6. There wouldn’t be a credit check or prepaid fees
7. It is easier to apply for federal consolidation than a private consolidationDisadvantages of a governmental loan consolidation:1. It will make special borrowers benefits invalid, if you have a Perkins loan.
2. It will make the six months grace period invalid. This means that you need to pay immediately.
3. If you have collected a large amount of debts, its possible that you end up repaying thousands of dollars more than the original amount of the loan, this is the consequence for the extended repayment term. The longer you are repaying, the more you have to pay.
4. If you have already repaid more than a half of your loans, it would be more smart not to consolidate your loans, you will save more money in the end.

Federal Student Loan Consolidation – How Federal Student Loan Consolidation Can Benefit You

Federal Student Loan Consolidation offers many benefits to those who need help making the payments to their existing federal student loans. When you consolidate, you combine all of your existing loans into one loan usually at a lower interest rate and an extended period. Federal student loan interest rates are currently at their lowest and by consolidating you can get a fixed interest rate which is locked in for the duration of your loan.What are some things to think about when consolidating?The extended payment feature can be beneficial as we indicated earlier, but only if you use it wisely. If you can afford it, it is recommended that you allocate at least one-third more of the monthly payment in order to not incur more interest fees over the life of your loan. Again, only put more towards the monthly payment if you can afford it. You won’t incur any penalties in prepayment should you continue to put more towards your monthly payment than the minimum.If you are in a situation where you are struggling to make the payments and have defaulted on your current federal loans, there is an option that may help you. If your are wondering what “defaulted” means, it means that you failed to make payments on your loan for either (a) 180 days if you repay in monthly installments or (b) 240 days if the payments are due less frequently. In this scenario, a FFEL consolidation loan may be the answer. Through a FFEL loan you consolidate several loans with various repayment schedules into one loan, similar to a consolidation loan. However, the repayments are set up based upon your income level. In order to qualify for a FFEL consolidation loan, you must currently be in repayment on the loan you defaulted or you have been able to make at least three voluntary and on time monthly payments in full.One other point to consider is that many times graduates try to consolidate all their federal and private student loans into one. It’s recommended that you keep them separate as this can cause you to lose some of your federal loan benefits. One example is if you combine both private and federal loans you can lose out on the interest tax deduction benefit you get with your federal student loans. You’ll need to be careful as there are many benefits to keeping these loans separate, especially when consolidating.So now that we’ve identified the points to consider, the following is a basic list of some student loans that are eligible to be consolidated: PERK – Federal Perkins Loans, formerly Nations Defense/National Direct Student Loans (NDSL), PLUS – Federal PLUS (Parent) Loans, SCON – Subsidized Federal Consolidation Loans, UCON- Unsubsidized Federal Consolidation Loans, SLS – Federal Supplemental Loans for Students (formerly Auxiliary Loans to Assist Students (ALAS) and Student PLUS Loans), SS – Subsidized Federal Stafford Loans & Guaranteed Student Loans (GSL), DSS – Direct Subsidized Stafford Loans, DUS – Direct Unsubsidized Stafford Loans, DPLUS – Direct PLUS Loans, DUCON – Direct Unsubsidized Consolidation Loan, including Direct PLUS Consolidation Loans.Federal student loan consolidation is a worthwhile option and can help to lift your student loan burdens. Research lenders and with interest rates still low, you can lock in a low rate and take advantage of the lower monthly payments.

Student Loans – Student Loan Consolidation Advice

Many graduates nowadays are having problem repaying their student loans and looking at the current economy situation, it is not uncommon that graduates are applying for deferment or forbearance for their loans. How about the graduates who are not qualify for both deferment and forbearance? Do they have to default their loans?If you are one of them, you might want to look into student loan consolidation. This program was designed to bring your multiple student loans into one low interest and manageable monthly payment.If you want to consolidate your loans, you have the option to do it with the federal government or private agency. And to let you know, both of these programs have their own pros and cons. For starter, you can enjoy fixed rate with the federal government student loan consolidation. Although private agency will consolidate your loans with fluctuate market rate, they do offer complimentary packages to bring out their unique service. Since every loan consolidators offer different packages, you have to research and look into each of them before you decide which to go to.By the way, please remember to discuss with your loan consolidators about the repayment plan that suit you the best. Remember, one man’s meat is another man’s poison. The repayment plan that suits best for other people might not be the one you need. You can have a hard time juggling between your consolidation and your life when you choose the wrong plan.Now, student loan consolidation is still a loan and you still need to pay it back. It is not that you are enjoying low monthly payment that you are free to spend. In fact, you have to be more diligent during your spending because you don’t want to spin yourself into a new debt. You can be in deep trouble if you defaulted your consolidation.If you really need to have credit card, only buy the things that you can afford and remember to clear your bills every month. Never for a moment think that you will be alright by paying the minimum monthly payment. This is because the interest rate is going to multiply on your outstanding balance and eat deeper into your wallet.

What You Should Know About Student Loan Consolidation Rates

When most people think of Student Loan Consolidation Rates, what comes to mind is usually basic information that’s not particularly interesting or beneficial.There are many options available for a student to select the best provider of student loan consolidation. Student loan consolidation rates are competitive and can be lend through government or private lender. You can search for a lender online and can check their interest rates. In any loan consolidation, interest rates plays a great role. There are many lenders that are lending loans to student but when it comes to their interest rates, they are charging very high which is unaffordable by a student.It is wise for students to look into consolidating loans and getting good rates as this can help a student shift into responsible bill paying consumer. A student has to pay interest every month and for their monthly bills, he has to pay separately but in student loan consolidation, a student has to pay only one payment.It is not uncommon for a borrower to get a fixed interest rate that is up to 0.6% lower than their current rates. According to federal regulations, calculating the interest rate on a consolidated loan disbursed on or after July 1, 1994 involves the weighted average of the interest rates of the old school loans you are consolidating under the new one, rounded up to the nearest one-eight of one percent. Fixed interest rates on a consolidated loan cannot exceed 8.25 percent.There are many advantages of getting a student loan consolidation and it is researched that Americans are the first one in the row of taking the advantages of the consolidation rates. Many students are taking the advantage of applying for student loan consolidation as it not only allows them to study well but give them the options of shopping also. Consolidations are one way of getting control over ones spending and effectively planning a budget. For the best student loan consolidation rates, you can search the internet and you should be able to find lenders who are proposing affordable payment plans. Students can then choose the best rates based on the many proposals that they get.Before you make up your mind, it is best to browse different company’s brochures so that you get the best student loan consolidation rates. You also need to enquire about the company’s creditability, etc. It is important to ask yourself about your requirements before you proceed to apply for student loan consolidation. When a student applies for student loans, it is advisable to check the terms that are offered by the student loan provider. But in the student loan consolidation you don’t have to apply for different types of loan, only one will solve all your problems. You have to make one monthly loan payment every month, instead of several loan payments every month over time. This not only saves the student’s time, but gives them total peace of mind, thereby enabling them to keep their sanity.

Pros and Cons of Federal Student Loan Consolidation

Not sure if you should opt for student loan consolidation?It may help you weigh your options and decide if you know more about the advantages of disadvantages of consolidating your college debts.Do you have a federal college education loan? If you do, then all the more that you have to read further to know if federal debt consolidation is your best bet.First, what does federal debt consolidation mean?Simply put, this means combining all your U.S. government loan into one easy monthly payments.Now what are the pros of federal student loan consolidation?• Lower monthly payments, lower federal interest rate and paying back over an extended period of time
• There are about four different payment plans you can choose from including an extended plan that lets you pay up to 30 years
• You get to pay only one payment a month which is more convenient than juggling two or three or more
• Consolidating federal loans do not require any fee
• No credit check is involved in the process of consolidating debts
• No pre-payment penalties involved
• The application process for this type of loan is so much simpler than othersHow about the disadvantages of student loan consolidation?• The extended payment plan will cause you to pay more interest in the long run. If your loan is really large, then this repayment option can cause you thousands of dollars
• Your consolidated interest rate can be higher than the rates on your other loans which could be disadvantageous to you
• Consolidating within the grace period will require you to pay immediately
• If you have already paid off a large portion of your total debts then there is no sense in wasting money and effort in consolidating your loans
• If you have a Perkins loan, consolidating debts will forfeit your special borrower’s benefits.

How to Repay Federal Student Loan When My Current Pay is Low?

“I can’t afford to make my monthly repayments on my federal student loans as my salary is not sufficient for me to do so.”Can this problem be solved?The answer is YES. You can take the proactive step to consolidate all your federal student loans. The method is very beneficial especially during economy downturn where the interest rates are relatively lower. Federal student loan consolidation is designed to extend the period of repayment so that your monthly payment is much lower than what you are paying currently. Based on the calculation, some people are able to lower their monthly payment by as much as 50% after consolidating the loan.There are basically 4 types of federal government student loan consolidation programs. Let’s take a closer look at them one by one.o Standard Repayment Plan
This plan offers the fixed monthly payments for a maximum duration of 10 years but it requires the highest monthly payment.o Graduated Repayment Plan
This plan often starts off with repaying the interest only. These payments will gradually increase until the loan is fully paid. This plan costs more in interest payments when it is compared with the first plan. It is the most ideal plan for the fresh graduates as they only need to make little payment when they have just started working with low salary.o Extended Repayment Plan
This plan offers a longer repayment period than the standard plan. The period can be extended up to 30 years but the interest rate is higher.o Contingent Repayment Plan
Under this plan, the amount of repayment is determined by your income, your total outstanding balances and the size of your family. The repayment period can be up to 25 years.Don’t worry when your current income is not sufficient to pay off your study loans. Go for federal student loan consolidation. It will assist to ease your financial burden.

About Your Student Loan Debt Consolidation

Anybody who has taken out multiple loans to help pay for school has probably looked at student loan debt consolidation at one point or another. Student loan consolidations are used specifically to help a student, or their parents, pay for multiple student loans with one easy monthly payment instead of the usual numerous payments.For many students it is a hassle to pay for each and every loan separately and keep track of each payment as proof in case it is needed in the future. In fact, many of them don’t continue on to even higher education because they are so far into debt that they can’t afford much more. It often damages credit and makes it hard for to be approved for much of anything. What is worse is that it can often take so much money a month that living costs, including food, can barely be met each month.In many of these instances, having a student loan consolidation program can prove to be helpful. Rather than letting the multiple student loans ruin a life, student loan consolidations work to help students and their family pay off their loans by lowering monthly payments so that they can all be met. Generally, assuming all payments are on time, this means that the credit of whoever is repaying the student loans is able to raise their credit score.When you decide to turn towards student loan consolidation help there are a few things you need to look at. First of all, what kind of student loan consolidation do you need?If you have federal student loans, then you will want to have those grouped together. It is important to have federal student loan consolidations, and then private student loan consolidations for one main reason. You can get certain breaks with federal student loan consolidations that are impossible to get if you mix the federal loans with the private loans.The interest rates. Student loan consolidation rates tend to be a little higher than the original rates, but that can be expected because they don’t generally charge any other fees. (A select few may charge a small fee, but that is only on certain loans, and you will never be charged on up front. If you are it is a scam, and you need to find another place). The interest rate that you are charged will be somewhere between your highest and lowest interest rate. When you’re looking you should always make sure that it isn’t above your highest interest rate, unless the interest rates for all of your loans are all the same. In that case it may be a little above those rates, but not a by much. When an interest rate is decided on for your student loan consolidation program it will stay at that rate for the entire time that you are working to pay off your new student loan consolidation.When you undergo student loan consolidations, you will find that money is less of a problem than before. After a student loan consolidation you pay only one low monthly payment, leaving extra money for things you need and want.