October 22nd, 2009
One of the most convenient ways to finance education is through student loans. However, student loans like all other loans have to be eventually paid back. After graduation you might find that the loans have accumulated and are hard to pay back. In such an event, you may consider consolidating your student loans. You can lower your monthly payments as well as save money with student loan consolidation.
Why should you consolidate student loans?
By consolidating student loans, you can combine all your loans together into a single loan. The benefit of student loan consolidation is that you will have only one lender and one payment to deal with. It will also give you the opportunity to lock in a low interest rate, which can save you hundreds of dollars over time.
What would be the cost of consolidating student loans?
When you consolidate your student loans you can bring down your monthly payments considerably, by as much as 60 %. The only drawback is that you may end up paying a larger sum of money over the life of the loan. Before consolidating your student loans, take time to evaluate the interest rate and loan terms. Shop around and compare lenders.
There are several Federal Loans eligible for Student Loan Consolidation. Many federal student loans already have a low interest rate. However, you may be able to achieve a lower payment by consolidating student loans. Below is a list of list of federal loans that typically qualify as student loan consolidation:
Federal Stafford Loans
Federal Direct Loans
Federal Perkins Loans
Federal Supplemental Loans for Students (SLS)
Federally Insured Student Loans (FISL)
National Direct Student Loans (NDSL)
Federal Parent Loans for Undergraduate Students (PLUS)
Loans for Disadvantaged Students (LDS)
Auxiliary Loan to Assist Students (ALAS)
Health Education Assistance Loan (HEAL)
By: William Brister
October 12th, 2009
In today’s academic world the majority of students have in excess of $20,000 worth of student debt by the time they graduate from college. This significant amount of money may naturally make life difficult at a time when you may have no job to go to or initially a low-paying job as your first step on the career ladder. Often the student debt will be spread across a number of different loans, possibly both federal and private and there is a need to manage the debt sensibly and to ensure that you pay as little interest as possible over the term of the loans.
Consolidation of student loans is a natural step to take to manage this issue, although you must not consolidate federal and private loans into one loan, otherwise you will lose your federal benefits, such as deferment or subsidized rates. Anyone who took out federal Stafford Loans, Federal Direct Loans and Perkins Loans while attending college is eligible to apply for federal student loan consolidation.
6 Reasons to Consolidate Your Student Loans
* Rather than standard 10 year loan terms, a consolidated loan can be stretched over 30 years, if necessary, allowing you to significantly reduce your monthly payments – by up to 50% – at a time when finances are tight. This in turn leaves you with more money to meet day-to-day expenses.
* By reducing your monthly payments, this can lower your debt to income ratio and therefore improve your credit score.
* Interest rates are currently as low as they have ever been and therefore you could fix your monthly re-payments at a very low interest rate.
* A consolidated loan leaves you with only one loan to manage – this is more manageable, less stressful and importantly leaves you feeling more in control of your finances.
* Most consolidated student loans do not carry penalty charges for early repayment, so that as your career progresses and you are able to pay off bigger chunks of your loan, you will not be penalized for doing so.
* Since July 1 2009 students may be eligible to take advantage of a new government program that bases the student loan repayments on income.
Therefore, if you currently have eligible federal student loans, totaling in excess of $20,000, the loans are not in default, and the borrower has graduated or is enrolled less than half-time, then it makes a lot of sense to apply for a consolidated loan.
By: Peter R. B.