December 21st, 2009
The Federal Student Loan Consolidation Program offers numerous benefits including locked-in interest rates that may save borrowers thousands of dollars and may cut monthly payments by up to 60 percent. NextStudent, the Phoenix-based premier education funding company, takes those incentives one step further by offering students a .6 percent discount if they consolidate their student loans during the six month grace period after graduation.
More Student Loan Consolidation Benefits from NextStudent
The interest rates for federal consolidation loans are set by the federal government, so the only true difference that individual companies can offer on their student loans are their incentive or discount packages. NextStudent offers substantial discounts both in the form of the .6 percent “New Grad” discount and additional incentive packages.
Borrowers have the option of choosing from three benefits packages. These packages include the “Standard Locked” package which offers a .25 percent discount when the borrower opts to pay via Auto-Debit and a 1 percent LOCKED RATE reduction after 36 consecutive on-time payments; the “2 %” package which offers a .25 percent discount when the borrower opts to pay via Auto-Debit and 2 percent rate reduction after 36 consecutive on-time payments (not locked); and the “Google” package which offers a .25 percent discount when borrower opts to pay via Auto-Debit, .375 percent discount after six months of on-time payments and the 1 percent discount after 36 consecutive on-time payments (not locked).
Qualifying for Federal Student Loan Consolidation
There are numerous advantages to student loan consolidation with NextStudent, regardless of which incentive package a borrower chooses. Qualification is simple with NextStudent’s “4-step easy e-app.” There are no credit checks, fees, or co-signers required. However, borrowers must have a total student loan balance of at least $10,500. In as little as 5 minutes applicants can qualify for student loan consolidation over the phone, and get their questions answered by a personally assigned Education Finance Advisor.
Students and parents can save significantly when they consolidate their student loans with NextStudent and take advantage of up to a 30 year repayment term, incentive packages and .6 percent “New Grad” discount.
NextStudent believes that getting an education is the best investment you can make, and it is dedicated to helping you pursue your education dreams by making college funding simple. Learn more about student loans at NextStudent.com.
By: Jeff Mictabor
December 18th, 2009
By using a federal student loan consolidation program, student loan holders can consolidate their existing educational loans.
The procedure is very simple: you just have to call the Direct Loan Servicing Center (a division of the U.S. Department of Education) and in a very short period of time, you’ll have your new consolidation loan.
The new interest rate will be a weighted average of the interest rates of all your current federal student loans.
It is even possible to consolidate additional debt into this loan if this is considered to be a viable alternative.
The main reason that leads people to ask for debt consolidation is the huge sum of money spent on monthly payments. If you mix all the loans into a single one, your new monthly payment will become very affordable, not to mention that the loan can stretch for a few more years.
In order to do that, you can go to the bank and ask for a personal loan. It’s recommended that you use a separate loan for the student loans and another one for the rest of the debts.
Financial experts don’t encourage the combination of student loans using a privately funded debt consolidation loan because that will only create more financial problems.
In most cases of federal student loans, the interest is tax deductible. Why would anyone give up such a benefit? In this situation, having two loans is better than having a single one.
The only exception is when the consolidation loan is actually home equity loan. If you’re lucky you can obtain an interest rate lower that the one from your student loan.
Home equity loans are also tax deductible and you won’t loose the benefits. In time your income will rise and that affect the interest of writing off the student loan.
But, with home equity loan interest, you can continue writing off the amount without any problems.
To sum up all the above, sometimes including a student loan next to other loans into a single one can be viable but there are times when separate loans are simply the best option.
By: Ricky Lim
December 10th, 2009
Student loan consolidation can be used by student or parent borrowers to combine their multiple education loans into one loan with one monthly payment. As any student can take either federal or private student loans, he or she can also take a federal or private consolidation loan to make the education debt more manageable.
Both federal and private student loans offer significant benefits, but federal loans offer borrowers many benefits that don’t come with private loans; for instance: low fixed interest rates, income-based repayment plans, loan forgiveness and deferment options. While some private lenders may offer them too, it usually is associated with some strings attached.
For those reasons, every borrower should always exhaust federal student loans options before considering a private loan. The same advice applies to consolidating student loans – always look at federal consolidation loan first and only if you don’t qualify for a federal loan of it is not the right choice for any reason, and then seek a private consolidation loan.
It is important to remember that a federal student consolidation loan can’t include any private loan. Moreover, if you consolidate your federal student loan into a private consolidation loan, you will lose your federal borrower benefits mentioned above (unless you private lender tries hard to get your business and includes them in the offer).
There are important differences between federal and private student loan consolidation.
First of all, with federal student loan consolidation, you will have a fixed interest rate, while private student loan consolidations are credit-based, which means that your consolidation loan rate will not be locked – it will be variable. So, while you will not have to go through credit check in order to apply for a federal consolidation loan, you will need it to secure a private consolidation loan. (more…)