Sometimes, what makes student debt so frustrating is the fact that if one did not have to pay so much money on interests, the income would be good enough to cover all the other expenses. In other words, the interests on debt prevent students from having a good standard of living and enjoying their youth.
It does not seem fair that one should have to cut on recreation expenses due to high and sometimes abusive interest rates. If this also forces students to cut one essential expenses such as food, transportation, studying material, etc. the whole point of student financing becomes just an excuse for exploitation.
Cash Flow Explained
What high risk lenders and credit card dealers that charge interests rates over 18% take advantage of is the fact that most students have cash flow problems. A cash flow interruption takes place when for some unexpected expense, a student has to spend all the cash he has for everyday transactions and has to seek finance. If the income-expense ratio is too tight, debt will start accumulating and this vicious circle will go on till an extraordinary income solves it or till the person is forced to fill for bankruptcy.
There is a simple way to prevent this problem; you need to have a contingency savings amount ready to cover for unexpected events and an income-expense ratio that will let you rebuild this quantity in just a couple of months. Saving 20% of your overall earnings is a smart thing to do; you can destine half of it to build the contingency funds and the other half for leisure expenses.
How To Solve Cash Flow Problems
If the cash flow interruption has already forced you to become increasingly indebted, there is a way of considerably reducing the incidence of debt interests in your budget. To do so you need to combine debt consolidation with a reduction on your expenses. With a student debt consolidation loan you will be able to reduce the amount of money you pay on interests and with a reduction on your other expenses you will be able to destine a higher amount of money to paying off the loan's principal in order to hasten your debt reduction process.
This combined effort will soon show its effectiveness as you will notice how the amount of money you pay on interests is progressively reduced and you will be able to retake all the non essential expenses you had to cut in order to get out of your debt problem. By then, the sacrifices you had to make will become praiseworthy.
How Student Debt Consolidation Loans Work
Student consolidation loans are granted with the sole purpose of repaying as much debt as possible. Since the interest rate charged for a consolidation loan is significantly lower than the average interest rate of student debt, the monthly installments will be considerably lower than the combined payments of the paid off loans and credit cards. This not only will reduce the debt burden but it will also save you thousands of dollars that you will be able to use for other important purposes.
Consolidate Debt Loans And Student Consolidation Loans Most Ask Questions
The first thing you would ask yourself when contemplating on a consolidate debt loan is, what is consolidate debt loans? Consolidating some or all your debts is a process of combining all your debts in to a single or one loan, with one monthly payment and in most cases low interest rate.
The lending company, who consolidate all your debts into one, will pay off all your current debts and loans and issue a new loan to you. Now that all your current debts are in one loan, you will only need to make one single monthly payment.
This could be your first query when thinking of consolidation, but either way it is entirely up to you. Benefits. Some of the benefits of a consolidation are that the payment processes get simplified. No more multiple monthly payments that may stresses you out.
You can lock in a low interest rate which will mean more savings for you. You can also extend the payoff time to several years depending on your eligibility (though this will increase your total interest to be paid on the life of the loan). You will only deal with one lender and can also lower your monthly payment.
You may also ask, am I eligible for a consolidated debt loan? Almost anybody can ask and get to consolidate debt loan. You can also consolidate anytime you would like to do it. Eligibility for consolidation varies from company to company or from lender to lender, as their basis for approving varies. But this can easily be check by logging online to verify or inquire about their qualifying requirements.
For student loans, it is a little bit different.
Some consolidators will require a minimum of 10,000.00 dollars in total debts for them to consolidate your loans. For school consolidation loans, the best place for you is through the federal government loans program. Here you can get the lowest interest rate for your college and/or school loans.
How about my monthly payments?How much will they cost me? A monthly repayment again varies depending on the amount of the loan and the length of the loan term.
The shorter the loan term, the more the amount is, whereas the longer the term is,the less amount money you have to pay monthly.
For students who do consolidate debt loans, they usually have flexibility payment options, depending on their budget and income. Just a reminder, the faster you pay it off, the less interest you have to pay.
How much is the interest on a consolidate debt loan? Most lenders have a competitive rate of interest, but if you shop around, you will find the best rate. Do some due diligence and research among the lenders who has the lowest interest rate.
For student consolidation, it is usually the weighted average of the interest rates on the loans being consolidated. Some have a variable rate and some have a locked interest rate (based on the current federal rate). Please be reminded that even tenths of percentage point can mean hundreds of dollars to you so always consider the lowest possible interest rate.
Start of repayment and about deferring of loans.
The start of repayment for students usually get a nine month grace period on repaying loans once you are out of school and some are 6 months. But the best thing to do is start sooner and you will be better off. On deferring your loan, yes you can, but that is if you are eligible. If for some reason you are not employed, or you are encountering some financial and economic difficulties, the U.S. department of education will pay the interest that accrues during the deferment period (this apply to school consolidation loans).
When you defer loans you do not have to pay it back, and interest will not accrue.
To maintain a good credit rating do not default on your school consolidation loans to avoid penalties and more payments later on. When you know your options, you may have the option to consolidate debt loans.
Everyone knows that college is getting more expensive as each school year goes by, so consider student consolidation of your loans. It will allow you to save money and will make the entire repayment process less complicated.
All of your payments will be neatly tied together, thus allowing for a lower interest rate and less stress as you pay off your debt.
When you consolidate student loans, you have to find a company that deals with loan consolidation. Several national companies specialize in this, and are willing to help you make your loan payments easier.
It is important to shop around for the best loan consolidation program because you will only have one chance to go through this process. Once a loan is consolidated, you won't be able to change it.
After you find a lender and get approval for your application, the lender will turn around and pay off your student loan debt to whomever you borrowed the money from for college. Then the lender will set up your payment plans, combining all your student loans into one single sum.
These payments will start immediately when you consolidate student loans, so it might be wise to wait until the end of your grace period after graduating before choosing to consolidate. Trying to pay off a loan without a steady job can be difficult, so you need to find a program that fits your needs.
Student consolidation payments will be longer than your original loan payments because it is a larger sum. Your interest rate will never change with this type of loan because you lock into it when you agree to consolidate your payments.
Therefore, although the rate may seem high, you won't have to worry about it going up when the rates change. This might play a decision as to when you decide to consolidate student loans because you will want to watch how low interest rates go before singing up.
There are both positives and negatives to choosing a student consolidation plan. You will be paying these off for a longer period because you have a larger sum with which to deal. On the other hand, you will be able to lock yourself into a fixed interest rate. Let these factors weigh in your decision.
Paying off student loan debt can be hassle-free if you go about it the right way. Student consolidation programs for loans are one of the easiest ways to fulfill your financial obligations for the college education your received.
It is always important to shop around and find the best lender who meets your own criteria and personal requirements. Finding the right lender can make a student consolidation program a piece of cake.
College costs are at an all-time high, leaving many students and their families unable to pay for four or more years of tuition. Luckily, both federal and private institutions offer student loans as a way to get through school and earn a degree. But what about after graduation when it comes time to repay the loan? That's when many people look at a student consolidation loan. Many people like consolidation because it makes the whole process of owing money more straightforward. Carrying several student loans means more paperwork, multiple deadlines, and different monthly amounts to keep track of. There is just too much of a chance that a mistake will be made or a payment will be missed somewhere down the line. But with a consolidated loan, there is only one monthly payment to take care of. You can hand over your loans to a consolidation company, and then the hassle of deciding what to pay whom every month goes away. The consolidation company is responsible for sorting it out, and all you are responsible for is writing out one monthly check to a single company. You're free to concentrate on other things. Consolidating also takes away the stress of owing money for many people. They may feel crushed by debt when there are multiple outstanding accounts pressing down upon their shoulders, but they can handle one single amount that needs to be repaid. For a lot of people, consolidation loans are about peace of mind. Others choose consolidation because it saves them money over the life of the loan. Depending on the interest rates of the individual loans and amounts owed, consolidation may mean significant savings. Sometimes, however, consolidation doesn't make much of a difference in the amount that you'll pay in the long run. It all depends on your situation. If some of your loans have a variable interest rate and you're concerned about them going up, consolidation might be a solution. Federal consolidation loans have fixed rates, so rolling your variable rate loan into a fixed consolidation loan can effectively lock in your interest rate, and you don't need to worry about it ever changing. Consolidation also lets people choose from a wider range of repayment plans. Sometimes it isn't the overall cost of the loan that concerns a person. What they really need is a lower monthly payment, even if it does mean that they'll end up paying more over the lifetime of the loan. Consolidation allows them to stretch out the length of the loan, meaning that they pay more in interest over the years but have a lower monthly payment to deal with. There are many reasons why someone would choose a student consolidation loan. It may save money, lower monthly payments, or simply eliminate stress and hassle. For many of these reasons, people choose to consolidate their student debt every day.
When someone reaches graduation usually wants to get rid of student debt as fast as possible in order to move on to another stage of his financial life. However, this is not always an easy task. Student debt accumulates and prevents graduated students from repaying the whole debt in a speedy manner. Sometimes students spend years paying just the interests on their loans while the principal remains intact.
Moreover, student loans usually have a mere 6 month grace period after graduation that lenders seem to think is enough time for someone to get a permanent job and a steady income. This is not always true; in fact, it takes far more than that to find a job. And those lucky enough to get hired within this period, usually get part-time jobs or temporary jobs which do not provide a good enough income to meet the loans’ installments.
Student Consolidation Loans
This situation forces students to resort to student consolidation loans so they can reduce the amount of their monthly payments and if possible reduce the amount of money paid on interests too. Furthermore the sole reduction of the number of outstanding loans cuts hundreds of dollars on administrative fees that are usually charged separately (though sometimes included in the interest rate).
Student Consolidation loans help by reducing the monthly payments; however, they will not speed up the debt reduction process unless you undertake other measures in order to boost their effects. There are many additional actions you can take in order to start eliminating debt more quickly so you can become debt free in a few years.
Cut On Unnecessary Expenses And Postpone Costly Actions
Till you find a permanent job, you can aid your debt reduction process by cutting on redundant expenses such as dinning out, attending to clubs every weekend, etc. Also, it will not kill you to keep sharing an apartment till you can afford rent on your own while managing to pay for your loan at the same time.
Basically, unless after paying for your loan monthly installment you have enough money to cover for any unexpected event, do not get into more unnecessary expenses and use the money to pay off the loan’s principal sooner or build some savings for emergencies.
Forbearances
Another option if you find yourself in a tight situation is to request your consolidation loan lender forbearance. Forbearance is a period of time during which the loan payments will be suspended. Make sure you use this time to solve whatever problem is preventing you from making your monthly payments and also to build some savings to cover for unexpected events in case this comes to happen again.
Most lenders offer forbearances only once a year and some of them only offer one in the whole life of the loan, so make sure you really need it before requesting this grace period. Otherwise if another unexpected event takes place you will not be able to use this tool and will have to resort to other finance sources worsening your debt problems.
Your alternative to Federal Student Loan Consolidation is Private Loan Consolidation. Most of the private student loan consolidation plans are sort of refinancing for getting out of the unsecured loan problems. Though all loan consolidations are regulated by the Federal as well as the concerned State Laws the interest rates, terms and conditions of the private student loan consolidation vary from firm to firm.
While interest rates with some of the agencies are higher in comparison to others, other benefits they provide may suitably counter balance the deficiencies in their plans. Therefore it is essential for you to get well acquainted with the details of the offers made by any private company because as you decide to go for the private loan consolidation many companies with come forward with offers. While some of them might look very interesting on the face they may be lacking in intrinsic values.
Private Student Loan Consolidation Interest rates
Some of the companies offer their beneficiaries the benefits of the introductory rate for the first year that could be as low as 7.9%. Such interest rates are derived basing on the three month LIBOR added with 5% to 8.5% interests. LIBOR means the London Inter Bank Offered Rates.
Unlike the Federal Loan consolidation you will have to pay fees in the range of 1% to 5% on both your personal credit and co-signer credit. They will however not be due immediately and will only be charged on the closure of the loans. Since they are added to the loans it increases your loan volume but the advantage is that it prevents any further out of pocket expenses that could accrue.
Private Student loan consolidation for undergraduates
In most of the private student loan consolidation plan the interest rates charged for undergraduates are identical. The primary rate is LIBOR added with 5 to 8.5 percent interests. Overall it may come in the range of 7.9% to 11.93%. There will be fees of around 1% to 5% depending on the type of consolidation you have opted for. The maximum term that is permissible is 25 years and the maximum balance for which such consolidation is permitted is $1, 50,000.
For example, if you have a principal of $50,000 and LIBOR rate at around 2.8%, your interest rate could be in the range of 7.9% to 8.1% for 25 years period. The prerequisites would be fees of 1% and your good credit rating which means you must not be defaulter against any loan as on date.
Get private student consolidation online
With the Internet and World Wide Web there to help you out getting the private student loan consolidation is easy. You can get them online. Numerous traders are providing such loan consolidation facilities and the only task for you would be to find out the best consolidation loan rate student. You can obtain the free information package provided by the providers on line or visit their FAQ section. Some of the providers also have a group of experts to enlighten you on various aspects of best student loan consolidation.
With student loan consolidation, think of it as a helpful stepping stone in the path of life, guiding you on your way out of debt easily. There are several great student loan consolidation rules that work to your advantage. Here are just a couple great things to consider when you consolidate your loans with Great Lake Student Loan Consolidation , Sallie Mae Student Loan Consolidation , ACS Student Loan Consolidation or Canada Consolidation Debt Loan.
Great Benefits Students Can Expect When Looking For Student Loan Consolidation
- Quick, easy, and secure online application
- Even lower interest rate when you use automatic debit
- No application fees or credit checks
- Different payment plans to meet your needs
- Fast and experienced personnel available to answer questions and process applications
- Advice and financial help- whenever you need it
Great Reasons to Consolidate Your Student Loan
- Reduce your monthly federal student loan payment up to %50!
- Lock in a low fixed interest rate
- Make one student loan payment- not 2 or 3
- Don’t get trapped or into debt
Know that you are not alone with student loan debt. By the time students graduate from a four-year public university, %66 of them will owe money and %73 of students graduating from a private school will owe money. The rising cost of college has increased the amount of people who will be borrowing money to go to college and it’s not just students that are borrowing money, parents of students are borrowing money at a fast rate too. Sadly, more than 40% of college graduates who don’t pursue graduate school blame student loan debt as the reason they could not go further. So now- take your future into your own hands and get out of debt faster- pay off your student loans now with student loan consolidation now.
During your student life you are not financially independent and lot of events occur that compel you to go for loans. Sometimes your educational expenses or irregular personal expenditures force you to borrow loans from various resources. The disastrous situation occurs when you fail to repay these loans in time. You begin to think on manipulating your financial matters and lose your focus on your career. Student consolidation loans are specially designed for these circumstances.
Characteristics
These types of consolidation loans, as the name specifies, combine all your various loans to a single debt. Thus you have to deal with a single lender in spite of a number of lenders scratching your brain. A very reasonable rate of interest releases pressure on your tight financial situation. These loans are available in both the forms, namely the secured and the unsecured form. If you go for the secured one you have to offer a collateral while nothing as such is required for the later one.
The key advantages of student consolidation loans
-you get rid of dealing with a numbers of lenders.
-you pay a lower interest thus saving a lot of money.
-you can think intensely about your career now.
The numerals
As considered earlier, these loans come with a very reasonable rate of interest as low as 9% to 13% APR. You can apply for an amount of £500 to £5000 depending upon your need and repayment capacity. The loan amount has to be repaid after you finish your education. Around 2 to 5 years duration is fixed for repayment.
Availability and application
Traditional market and online resources both offer the consolidation loans for the students. But online resources provide a speedy and smooth procedure and thus they are preferred. You just have to select the most suitable lender and apply to him online. Now some dummy documentation is to be performed by you. You may now expect the funds available within a few working days to consolidate your loans.
In student life admission fees, tuition fees, accommodation, need of computers all these are basic needs of a student and in the process of securing his degree student accumulate a number of loans. But during repayment time they get trapped into the cobweb of loans with high interest and several monthly cheques. This makes their life hell. The best solution to get rid of this is student consolidation loan.
Student consolidation loan aims at bringing down your burden. It consolidates all loans taken by a student for his studies and hence he has to pay only one payment monthly than several separate installments.
Benefits
1) Due to consolidation it is easy to pay one payment monthly than several separate payments.
2) Student debt consolidation loan carries less interest than others.
3) As it for students it is easily available.
4) If payments are made regular interest rate is reduced. This varies with the different lender’s policy. For example some company says that if the borrowers will regularly pay for two years their interest rate will be decreased by some factors.
5) Options for flexible payments is there.
6) As this loan meant for student therefore no credit check for borrowers.
Student consolidation loan can be classified as secured and unsecured form. In the secured form collateral is required while in unsecured no collateral is required. In the secured form the interest rate is less as borrower has kept something as collateral. Unsecured form is preferred when loan amount is small.
There are many banks which gives this loan. Internet is the best way to search and choose suitable lender for student consolidation loan. You can get student consolidation loan instantly through online application process. Its mechanism is easy and the borrower’s credit and personal details are required.
Student consolidation loan is meant for student so that they can have stress free education, far away from the strain of the debts. It is a known fact that students are, on which depends the future of any country. Thus they are the most valuable resource and thus be given a full freedom to concentrate on their studies only and not wasting their time and energy on such matters which might hamper their future. There may come many times in their career when they may be in need of money, for example, to clear some pending fees, to buy books, buy computers and for such other things, thus the importance of student consolidation loans. It relieves them of all the tension regarding these and thus helps them to have hassle free education. Something which is as essential for them as students are considered the nation builders
The main idea behind student loan consolidation is to reduce the interest rate and lengthen the term on all of your student loans. Because rates are currently low, consolidating can easily reduce your monthly payments. In addition, because the consolidated loans are for longer terms than the original student loans, the monthly payment goes down. The net effect is that your loans are more affordable and you're more likely to make payments on time. The rates are usually kept low considering the fact that the student is already under lots of pressure relating to his or her course and thus not to put any extra burden on him.
Student consolidation loan are generally meant for students to have their studies be completed uninterrupted. Owing to the fact that how the fees and all the related expenses are becoming higher and higher day by day, it becomes more important to provide a student with such an option so that the unfortunate situation of a student leaving his or her studies due to unavailability of money never arise. And student consolidation loan is meant exactly for this purpose only which help the student to meet all their expenses and thus having a tension free education.
Summary
Student consolidation loans help to manage all the existing debts for students. With the help of these loans a student can focus on his studies and not on various loans whose repayment can be catered by such loans.
With interest rates rising, and your repayments on your variable rate student loan rising, you might be wondering if a consolidation loan would be a good idea.
Right now, the sub-prime mortgage crisis is causing a lot of problems for a lot of people. Rising interest rates mean the mortgage payments are rising, and many people are no longer able to meet the minimum required payments, so financial institutions are foreclosing, evicting people, and selling the homes for whatever they can.
Tempers are getting so bad, that evicted owners are starting to vandalize their own homes - ripping out toilets, destroying electrical panels, and defacing walls and fixtures that can't be taken. It has gotten so bad, that companies like Prudential are now offering incentives to evicted homeowners to leave the home in selling condition.
So, what does this mean for you and your student loans? Well, the financial institutions make their money on an interest-rate spread - the difference betweeen what they pay to to Federal Reserve, and the amount you pay to them. So as long as the spread is positive, they are making money, and everyone is happy.
This means that a new consolidation loan would be taken out at a new, higher interest rate (since rates are going up), and the only way you could pay a lower net amount is to change the terms. You will be able to reduce the amount you pay by extending the time you take to pay the loan off.
Note: student loan consolidations can renew your deferment choices if you have already exhausted the deferment options on your existing federal student loans. A student loan consolidation can significantly reduce your monthly payment burden. Consolidation allows you to stretch your repayment period from the standard 10 years to up to 30 years, depending on the total education debt. Student loan consolidation programs allow for a borrower's loans to be paid off and a new consolidated loan created. These programs simply loan repayment by combining several types of Federal education loans into one new loan.
Interest rates for variable student loans are reset on July 1. In the past two years, rates have risen from historic lows, but this year the rates will remain the same. Rates will rise from 3.37 percent to 5.26 percent for student borrowers already making payments.
If you are thinking of defaulting on your student loan, be very careful, because there are big penalties for non-payment on a student loan, especially a federally guaranteed one.
If you wish to pay down your loan quicker, there are ways to avoid pre-payment penalties. If you are getting a first time educational loan, there are places that can help improve your odds of getting accepted.
A consolidation loan is not the best option for everybody, but in many cases, it can help lower your overall expenses, and give you a bit extra money each month, to help with the things that are important to you now
Consolidate Debt Loans And Student Consolidation Loans Most Ask Questions
The first thing you would ask yourself when contemplating on a consolidate debt loan is, what is consolidate debt loans? Consolidating some or all your debts is a process of combining all your debts in to a single or one loan, with one monthly payment and in most cases low interest rate.
The lending company, who consolidate all your debts into one, will pay off all your current debts and loans and issue a new loan to you. Now that all your current debts are in one loan, you will only need to make one single monthly payment.
This could be your first query when thinking of consolidation, but either way it is entirely up to you. Benefits. Some of the benefits of a consolidation are that the payment processes get simplified. No more multiple monthly payments that may stresses you out.
You can lock in a low interest rate which will mean more savings for you. You can also extend the payoff time to several years depending on your eligibility (though this will increase your total interest to be paid on the life of the loan). You will only deal with one lender and can also lower your monthly payment.
You may also ask, am I eligible for a consolidated debt loan? Almost anybody can ask and get to consolidate debt loan. You can also consolidate anytime you would like to do it. Eligibility for consolidation varies from company to company or from lender to lender, as their basis for approving varies. But this can easily be check by logging online to verify or inquire about their qualifying requirements.
For student loans, it is a little bit different.
Some consolidators will require a minimum of 10,000.00 dollars in total debts for them to consolidate your loans. For school consolidation loans, the best place for you is through the federal government loans program. Here you can get the lowest interest rate for your college and/or school loans.
How about my monthly payments?How much will they cost me? A monthly repayment again varies depending on the amount of the loan and the length of the loan term.
The shorter the loan term, the more the amount is, whereas the longer the term is,the less amount money you have to pay monthly.
For students who do consolidate debt loans, they usually have flexibility payment options, depending on their budget and income. Just a reminder, the faster you pay it off, the less interest you have to pay.
How much is the interest on a consolidate debt loan? Most lenders have a competitive rate of interest, but if you shop around, you will find the best rate. Do some due diligence and research among the lenders who has the lowest interest rate.
For student consolidation, it is usually the weighted average of the interest rates on the loans being consolidated. Some have a variable rate and some have a locked interest rate (based on the current federal rate). Please be reminded that even tenths of percentage point can mean hundreds of dollars to you so always consider the lowest possible interest rate.
Start of repayment and about deferring of loans.
The start of repayment for students usually get a nine month grace period on repaying loans once you are out of school and some are 6 months. But the best thing to do is start sooner and you will be better off. On deferring your loan, yes you can, but that is if you are eligible. If for some reason you are not employed, or you are encountering some financial and economic difficulties, the U.S. department of education will pay the interest that accrues during the deferment period (this apply to school consolidation loans).
When you defer loans you do not have to pay it back, and interest will not accrue.
To maintain a good credit rating do not default on your school consolidation loans to avoid penalties and more payments later on. When you know your options, you may have the option to consolidate debt loans.
Student consolidation loans are the best options for students to pay for their college fees. However, the rates may also be a burden especially if you were not able to choose the best rate for you. Before you sign up on any plan, always remember to consider the rates involved with their plans.
Here Are 7 Tips to Consider Before You Choose a Lender
1. Student loan consolidation rates may vary depending on the borrower's financial situation and credit. It is recommended that you have a good credit score in order for you to have a lower interest rate. This is the first step in getting the best rate for you on your student consolidation loans.
2. Determine the monthly plans. The monthly plans may depend on the student loan situation and the lender you choose. The monthly plans may vary depending on these factors. Some lenders can offer up to 50% lower monthly plans. It is recommended that you know this information before you make a final choice on your lender.
3. The lender should have simple loan payments. The main purpose of the student loan consolidation is to simplify your payments. You should review their terms and make sure that the monthly payments will not cause more burden to you.
4. The lender should have a fixed interest rate. Most federal student loan consolidations charge interest at a fixed rate. It is advised to make a research on the lowest rates and consider if it will increase or not. There are options online where you can calculate the interest rates and compare it with your present student loans. This will help you assess which rates will help you most. This is also a chance for you to narrow down your choices. You may limit your choices to the lenders that can offer you lower interest rates.
5. Know if the lender will be able to extend your payment period. With student loan consolidation, you will be able to lower your monthly payment and at the same time extend your payment period up to 30 years. Before choosing a payment term, make sure that this will not burden you especially once the monthly payments have been calculated depending on the payment period.
6. Ask if there are in school student loan consolidation programs. These programs will help you lock your low rate while in school. This is because you will automatically be placed on a deferment status while in school. With this option, you will lose the 6-month grace period that is usually offered to borrowers. However, you may request for a forbearance of up to 1 year. Before deciding on this, make sure that you do your research and gather information from other borrowers online.
7. Evaluate which lender provides the lower interest rate. The student loan consolidation is the best option since it helps you save thousands of dollars. They provide the lowest rates that can do great help on your expenses. You should gather enough information on which lender offer new interest rates that are much lower. You may be stuck in a lender, which has a higher interest rate without knowing that there are lenders that now offer lower rates. It is advised that you keep yourself updated with the rates that are charged by different lenders on student loan consolidation
If you are graduating college soon, now is the time to begin preparations for your student consolidation loan. You have a six month grace period after graduation before payments begin, but the consolidation loan application process can take several weeks, especially if you haven't gathered all your loan information and decided on a lender.
Inventory your student loans. Make a list of all your loans, including type of loan, lender, the amount of your loans, interest rates and the amount of your payments. Review your loan documents, contact your lenders or loan servicers or go to the National Student Loan Data System (NSLDS) website. If you don't know your PIN (Personal Identification Number) to log in, you will have to request a new one and it will be mailed to you. Expect to wait a week or two for the PIN to arrive, so best to get it done early.
Calculate Your Current Monthly Payments. If you are already in a repayment status, you will know your exact monthly payments. However if you are still in school or in your grace period, you should estimate your monthly non-consolidated loan payment based on the current interest rates and your loan balance. You can also check your estimated payment amounts by contacting your lenders or loan servicers.
Budget? What's a Budget? Though many people wander through life from paycheck to paycheck without knowing where their money is going, you really need to set up a budget to see if student loan consolidation is for you. Once you have that first job, determine a reasonable amount of your income that can be allocated to your student loan payments. This percentage should be based on a realistic budget. Then see if the estimated loan payment amounts you calculated above will fit into your budget.
If your estimated or actual payment exceeds that monthly budgeted amount, reevaluate your income and outflow. Can you trim any areas of your budget? Can you increase your income?
If it's a short term issue (expected raise in pay, getting a part time job, etc.), consider your deferment or forbearance options.
However, if there is no light at the end of the tunnel, it is time to consider consolidating your student loans.
Select loans for consolidation. Determine which of your loans are eligible for federal consolidation. A listing of the loans that can be consolidated in addition to Stafford and Perkins can be found at Eligible Consolidation Loans.
Private student loans are not eligible to be consolidated through the Federal consolidation programs.
You might lose some discharge (cancellation) benefits or deferment benefits if you include certain types of loans in your consolidation loan like Federal Perkins Loans, for example. You can contact the holders of your loans to find out what the impact of consolidation will be on your current benefits.
Consolidate Your Loans. Try going through the Federal Direct Loan Consolidation Program. You can make the application online.
If you have graduated, but are still in the grace period, start the consolidation process approximately two months before the end of the grace period. This will allow enough time to have your consolidation loan processed before the grace period expires, yet not so early that you lose too much of your grace period if you have a FFEL consolidation loan. (If you consolidate FFEL loans during the grace period, you will give up whatever portion of your grace period remains. You retain all of your grace period, however, if you get a Direct Consolidation Loan.) Some FFEL lenders offer to hold disbursement of consolidation loans until the end of the grace period to enable borrowers to minimize their interest rate and maximize their grace period. Check with your lender to be certain.
Keep in mind that if you consolidate during your grace period, you can lock in an interest rate at least a half percent lower than the current repayment rate. Many lenders will give you a discounted rate if you sign up for electronic payment and also for making a certain number (usually 36) of on-time payments.
When filling out the consolidation application, make sure you provide complete and correct address information, include two references, and sign the promissory note. Miss any of these and you will delay the processing of your application.
If you are already in repayment, continue making payments on your loans until consolidation is completed. If you need immediate payment relief, request deferment or forbearance
Federal Student Consolidation Loans V/s Private Student Consolidation Loans
If you want to save the amount paid as interest for your various loan bills, it is a wise decision to go for consolidation of loans. As a student, you may have taken numerous loans for educational purposes, consolidating them and paying one single monthly payment is a great idea.
Private Student Consolidation Loans
Sometimes private loans are taken by students to supplement federal loans that are inadequate for covering educational expenses. Private student consolidation loan is of variable interest rate, the student's credit rating is under scanner for private consolidation loans. All previous loans are consolidated into one major monthly payable loan. The minimum consolidation required for private consolidation loan is $7,500 and maximum amount comes up to $150, 000.
Borrowers with good credit score could get private loans with low interest rate. A co-signer with superior credit rating may also acquire low APR private loans. Undergraduate students can receive a long repayment term of more than 20 years with low monthly pay schemes.
Federal Student Consolidation Loans
Federal student consolidation loans have lower interest rates and monthly payments. The interest rate is fixed and constant. There is no credit checking or application charges prior to a federal consolidation loan sanction. Students could cut their monthly payments by nearly 50% with a federal consolidation loan. It is the best chance to improve on credit ratings. Students can apply for federal consolidation loans even during their grace period.
Federal consolidation loans is flexible, the students can make larger payments when they have more money with them, thus reducing the repayment term. Federal loan consolidation can include popular loan companies such as Parent PLUS loan consolidation; HEAL loans, Federal FFELP, etc.
Federal loans for students have lower interest rates in comparison to the private student loans. These federal consolidated loans are subject to government influenced subsidized interest pay rates during the time of enrollment and adjournment. The federal loans have fixed interest rates and fees amount, the lender cannot increase them. Federal loans are immensely beneficial for borrowers.
While federal loans could be included in private loan consolidation, private loans are not considered by federal loan consolidators. For college loan consolidation, there is no need to be working or employed. There is no need for collateral security or co-signer with you. Students find consolidation of loans as a good and convenient option, but it is advisable not to combine federal and private loans for acquiring consolidated private loans. Best consolidation student loan rates can be acquired even through online application with a reputable company. You have to fill in the loan application page and within a day or two, the particular finance company agents contact you via email, telephone or in person.
Student consolidation loans are the best options for students to pay for their college fees. However, the rates may also be a burden especially if you were not able to choose the best rate for you. Before you sign up on any plan, always remember to consider the rates involved with their plans.
1. Student loan consolidation rates may vary depending on the borrower's financial situation and credit. The monthly plans may depend on the student loan situation and the lender you choose. Some lenders can offer up to 50% lower monthly plans.
2. The lender should have simple loan payments. The main purpose of the student loan consolidation is to simplify your payments.
3. The lender should have a fixed interest rate. Most federal student loan consolidations charge interest at a fixed rate. There are options online where you can calculate the interest rates and compare it with your present student loans. You may limit your choices to the lenders that can offer you lower interest rates.
4. With student loan consolidation, you will be able to lower your monthly payment and at the same time extend your payment period up to 30 years.
5. Ask if there are in school student loan consolidation programs. These programs will help you lock your low rate while in school.
6. Evaluate which lender provides the lower interest rate. The student loan consolidation is the best option since it helps you save thousands of dollars. You should gather enough information on which lender offer new interest rates that are much lower. It is advised that you keep yourself updated with the rates that are charged by different lenders on student loan consolidation.
The Advantages of Student Loan Consolidation
In order to make simple the payment of federal student loans, it is highly advisable that you consider consolidating your loans - this is done by combining all the different types of loans you incurred. One is that federal student loan interest rates are currently at their lowest, so consolidating your loan means that the interest rate used for the whole duration of your loan is fixed.
One category you could take into consideration regarding federal student loans is availing of the FFEL student consolidation loan. This loan program helps any borrower especially students via multiple repayment schedules. Thanks to the FFEL student loan consolidation program, only one payment is made each month.
Disadvantages of availing student loan consolidations, if there are any, actually depends on you. Refinancing student loans again depends on the borrower. The United States Department of Education does not in any way allow any borrower to refinance a student loan consolidation. But if in case a borrower has an additional federal loan that is not originally included in the loan consolidation, these debts may then be added and calculated again into a another Federal Consolidation Loan.
Here are some of the Student Loans that can be consolidated:
1. SS - Subsidized Federal Stafford Loans & Guaranteed Student Loans (GSL) 2. DSS - Direct Subsidized Stafford Loans 3. DUS - Direct Unsubsidized Stafford Loans 4. DPLUS - Direct PLUS Loans 5. DUCON - Direct Unsubsidized Consolidation Loan, including Direct PLUS Consolidation Loans 6. US - Unsubsidized and Non-subsidized Federal Stafford Loans 7. NSL - Federal Nursing Loans 8. HEAL - Health Education Assistance Loans
Sometimes, what makes student debt so frustrating is the fact that if one did not have to pay so much money on interests, the income would be good enough to cover all the other expenses. In other words, the interests on debt prevent students from having a good standard of living and enjoying their youth.
It does not seem fair that one should have to cut on recreation expenses due to high and sometimes abusive interest rates. If this also forces students to cut one essential expenses such as food, transportation, studying material, etc. the whole point of student financing becomes just an excuse for exploitation.
Cash Flow Explained
What high risk lenders and credit card dealers that charge interests rates over 18% take advantage of is the fact that most students have cash flow problems. A cash flow interruption takes place when for some unexpected expense, a student has to spend all the cash he has for everyday transactions and has to seek finance. If the income-expense ratio is too tight, debt will start accumulating and this vicious circle will go on till an extraordinary income solves it or till the person is forced to fill for bankruptcy.
There is a simple way to prevent this problem; you need to have a contingency savings amount ready to cover for unexpected events and an income-expense ratio that will let you rebuild this quantity in just a couple of months. Saving 20% of your overall earnings is a smart thing to do; you can destine half of it to build the contingency funds and the other half for leisure expenses.
How To Solve Cash Flow Problems
If the cash flow interruption has already forced you to become increasingly indebted, there is a way of considerably reducing the incidence of debt interests in your budget. To do so you need to combine debt consolidation with a reduction on your expenses. With a student debt consolidation loan you will be able to reduce the amount of money you pay on interests and with a reduction on your other expenses you will be able to destine a higher amount of money to paying off the loan's principal in order to hasten your debt reduction process.
This combined effort will soon show its effectiveness as you will notice how the amount of money you pay on interests is progressively reduced and you will be able to retake all the non essential expenses you had to cut in order to get out of your debt problem. By then, the sacrifices you had to make will become praiseworthy.
How Student Debt Consolidation Loans Work
Student consolidation loans are granted with the sole purpose of repaying as much debt as possible. Since the interest rate charged for a consolidation loan is significantly lower than the average interest rate of student debt, the monthly installments will be considerably lower than the combined payments of the paid off loans and credit cards. This not only will reduce the debt burden but it will also save you thousands of dollars that you will be able to use for other important purposes.
When you consolidate student loans, you are bound to enjoy immense loan advantages and benefits. Student consolidation loans indeed have a wealth of financial benefits to offer the borrowers. However, one of the most important benefits that they can actually provide is the savings to interests.
As years pass, the college debts that you have accumulated each have its own variable rate of interest. This only means that if you are able to obtain a number of loans during the course of your studies, you are obligated to pay repayments of different amounts because of the various interest rates. Such rates are not fixed and are in fact on an unstable rise and fall annually, depending on the condition of the economy. And because more often than not the interest rates climb up, it is advisable to just merge your college debts and instead obtain student consolidation loans.
When you decide to consolidate student loans, this allows for your rates of interest to be locked at the current rates of the loan. This technique permits a prospective student borrower to earn more dollars in the process.
Actually all of the college loans that you have taken out from various lenders or loan companies are considered a real burden. Once college borrowers are able to merge their multiple loans, they arrive at new student consolidation loans, which come from a single lending company instead of the usual many. This certainly is a great convenience in terms of loan payments.
Other advantages and benefits of student loan debt consolidation include low payment every month. Borrowers become responsible to a much lesser amount in repayment on a monthly basis. Likewise, fixed student consolidation loans are now available as the rates of interest are also fixed. This means smaller amount in repayment as well as locked-in rates of interest.
A student consolidation loan is a loan that consolidates all your student loans into one student loan. You might ask why anyone would consolidate their loans. Well statistically speaking the average American will carry up to 13 credit cards with a debt of over $5,000. If you do the math, having many different loans with different companies, will mean that your interest rates will also be different.
When you consolidate your student loan you're combining all your debts with one lender with a much lower interest rate. The reason for a lower interest rate is that you get to pay off your debt for a longer period, sometimes up to 20 years.
Here's where it can get very tricky, so it pays off to choose the right student consolidation loan company before you consolidate your debts. One of the most common mistakes students can make is consolidating their loans with the wrong lender. If you don't read the fine print carefully you'll end up paying more in interest because all you're really doing is stretching out your payments over a longer period. If you calculate all the interest you're paying it will end up higher than your current loan.
So it's very important that you don't consolidate your student loan with just any lender. You'll need to get smart when selecting a lender because it's your money and you don't want to end up with a 20 year loan that you're unhappy with. Here's a few things you can look out for the next time you're looking to consolidate your student loans.
1. Don't sign up to anyone who asking for large upfront fees. If there's any fees make sure you know what they are for. 2. Avoid consolidation lenders who try to rush you into signing up with them. You should take your time, look around and compare rates before you sign anything. 3. Get a check list of all the agreements before you sign. Don't take anyone's word or promises. Make sure that everything is on paper. 4. When you've found the right consolidation company make sure you check them out on the "Better Business Bureau" and see if they've had any complaints. Nothing worse then a company who never delivers. 5. You'll also need to check if the company accredited by the Association of Independent Consumer Credit Counselling Agencies. This will ensure that they are allowed to consolidate your loan. 6. Last but not least ask if you can get a better rate or any special bonuses or offers available. It never hurts to ask sometimes companies are planing on running specials on the following week. So you don't want to miss out on any savings you can get your hands on.
I hope these few tips will help you choose the right student consolidation loan company. All the best with your studies and hope you do well in class.
Everyone knows that college is getting more expensive as each school year goes by, so consider student consolidation of your loans. It will allow you to save money and will make the entire repayment process less complicated.
All of your payments will be neatly tied together, thus allowing for a lower interest rate and less stress as you pay off your debt.
When you consolidate student loans, you have to find a company that deals with loan consolidation. Several national companies specialize in this, and are willing to help you make your loan payments easier.
It is important to shop around for the best loan consolidation program because you will only have one chance to go through this process. Once a loan is consolidated, you won't be able to change it.
After you find a lender and get approval for your application, the lender will turn around and pay off your student loan debt to whomever you borrowed the money from for college. Then the lender will set up your payment plans, combining all your student loans into one single sum.
These payments will start immediately when you consolidate student loans, so it might be wise to wait until the end of your grace period after graduating before choosing to consolidate. Trying to pay off a loan without a steady job can be difficult, so you need to find a program that fits your needs.
Student consolidation payments will be longer than your original loan payments because it is a larger sum. Your interest rate will never change with this type of loan because you lock into it when you agree to consolidate your payments.
Therefore, although the rate may seem high, you won't have to worry about it going up when the rates change. This might play a decision as to when you decide to consolidate student loans because you will want to watch how low interest rates go before singing up.
There are both positives and negatives to choosing a student consolidation plan. You will be paying these off for a longer period because you have a larger sum with which to deal. On the other hand, you will be able to lock yourself into a fixed interest rate. Let these factors weigh in your decision.
Paying off student loan debt can be hassle-free if you go about it the right way. Student consolidation programs for loans are one of the easiest ways to fulfill your financial obligations for the college education your received.
It is always important to shop around and find the best lender who meets your own criteria and personal requirements. Finding the right lender can make a student consolidation program a piece of cake
College costs are at an all-time high, leaving many students and their families unable to pay for four or more years of tuition. Luckily, both federal and private institutions offer student loans as a way to get through school and earn a degree. But what about after graduation when it comes time to repay the loan? That's when many people look at a student consolidation loan. Many people like consolidation because it makes the whole process of owing money more straightforward. Carrying several student loans means more paperwork, multiple deadlines, and different monthly amounts to keep track of. There is just too much of a chance that a mistake will be made or a payment will be missed somewhere down the line. But with a consolidated loan, there is only one monthly payment to take care of. You can hand over your loans to a consolidation company, and then the hassle of deciding what to pay whom every month goes away. The consolidation company is responsible for sorting it out, and all you are responsible for is writing out one monthly check to a single company. You're free to concentrate on other things. Consolidating also takes away the stress of owing money for many people. They may feel crushed by debt when there are multiple outstanding accounts pressing down upon their shoulders, but they can handle one single amount that needs to be repaid. For a lot of people, consolidation loans are about peace of mind. Others choose consolidation because it saves them money over the life of the loan. Depending on the interest rates of the individual loans and amounts owed, consolidation may mean significant savings. Sometimes, however, consolidation doesn't make much of a difference in the amount that you'll pay in the long run. It all depends on your situation. If some of your loans have a variable interest rate and you're concerned about them going up, consolidation might be a solution. Federal consolidation loans have fixed rates, so rolling your variable rate loan into a fixed consolidation loan can effectively lock in your interest rate, and you don't need to worry about it ever changing. Consolidation also lets people choose from a wider range of repayment plans. Sometimes it isn't the overall cost of the loan that concerns a person. What they really need is a lower monthly payment, even if it does mean that they'll end up paying more over the lifetime of the loan. Consolidation allows them to stretch out the length of the loan, meaning that they pay more in interest over the years but have a lower monthly payment to deal with. There are many reasons why someone would choose a student consolidation loan. It may save money, lower monthly payments, or simply eliminate stress and hassle. For many of these reasons, people choose to consolidate their student debt every day.
Student consolidation loan is the best loan for student to manage any other loan. Getting admitted to a good college or having the best education does cost a lot of money for the young students, which they readily cannot manage and thus take loans from different organizations. The problem is that the students get bogged up with the burden of these loans by the end of the month. In that case it is very helpful for them to think about the student consolidation loan.
Each of these loans has different rates of interest, which keep fluctuating over the period of time, and can be difficult for the students to manage at certain occasions. The best possible way to get rid of this hassle is to have your loans consolidated, which enables you to deal with them all together.
As far as the consolidation programs are concerned, they can be afforded by any student at any point of time. The purpose of these loan consolidation processes is to gather all the outstanding loans together and provide a unique solution to the problem. This is much better than having to keep paying different loans at varying rates over a period of time,
With the increasing price in education and demand for a better life, most students tend to take up more than one federal education loan during their university period and later for their continuing education. In most cases students do not understand the added responsibility that comes with these loans. The major problem comes when they have to repay several loans after their college ends. Thus, always remember to make use of the resources available to you, like loan consolidations.
Federal Student Loan Consolidation Plans: There are 4 consolidation loan repayment plans with fixed interest rates to choose from: Standard Repayment Plan: The interest is fixed and the monthly payments are fixed at a minimum of $50 for a maximum of 10 years. Extended Repayment Plan: Under this plan the borrower pays fixed monthly payments that are less than the Standard plan. The repayment period can range anywhere from 12 to 30 years depending on the total amount borrowed. Graduated Repayment Plan: This is another option that might work well for those who expect their income to increase gradually. the repayment period varies from 12 to 30 years depending on the total amount borrowed Income Contingent Repayment Plan (ICR): The Income Contingent Plan is more flexible than the other 3 plans because it considers the borrower's adjusted gross income, family size and the total amount borrowed when calculating monthly payments. The repayment period is a maximum of 25 years.
Private education loans can be a life saver when you are not qualified to get a federal education loan. State backed loans are considerably harder to qualify for as they have some strict sets of regulation and require more background checks whereas private loans can be a lot easier to apply for, but a fact all students should understand is that private student loans too can be a huge problem in the long run as they include hidden charges and various other duties which tend to dent your financial condition when you start repaying your student loan.
There are many well known private lenders who deal with consolidation loan but are careful some fraud lender who can cheat with you. Before going to select your private student consolidation lender you must consider the following things: - Trusted, Reliable And Reputable- Fixed Rules And Regulation, - No Fees For Registration And Advise, - Fraudulent Companies( Usually companies offering extremely fast debt consolidation loans are not trusted, review every aspect of terms and conditions before apply with them).Last but not least, remember that specialized advise is always recommendable, by working with a seasoned credit debt counselor you will get the most of a debt consolidation program, this kind of expertise usually pays by itself
Student consolidation loans are meant to reduce the number of monthly payments, to cut the amount of interests paid for finance and to reduce the amount of money destined to pay off student debt so you can use the surplus for other purposes.
Though these loans are great for getting hold of the benefits portrayed above, there are many things that must be taken into account when undertaking student debt consolidation that may reduce or boost these benefits. Since knowledge does not take up space, read on and make sure to remember these tips and tricks so you can make the most out of your debt consolidation loan:
Keep your Government Loans and your Private Loans Apart
Federal student loans usually come with many benefits you surely want to keep. This includes a significantly lower interest rate that you will not be able to beat with any private consolidation loan. So if you need to consolidate your federal student loans, you will need to resort to government consolidation programs. Use private consolidation loans only with private student loans.
Focus on getting rid of variable rate loans
Though sometimes lower, variable rates tend to be a problem since you cannot predict market variations and thus your budgeting may be useless. If possible, consolidate all your variable rate loans into a single fixed interest student consolidation loan and leave fixed interest rate loans aside unless you can get a significantly lower interest rate with the consolidation loan.
Watch for prepaying penalties
Some lenders penalize those who pay off their debt sooner by adding extraordinary fees to the overall debt claiming additional administrative costs. If this is the case, you should leave low balance loans aside. If the fees are not covered by the amount of money you will be saving by consolidating the loan you will want to continue paying the loan on its original terms.
Keep your credit report clean
Try not to incur in delinquencies as this will be recorded into your credit history and prevent you from getting a good interest rate when applying for a consolidation loan. Before applying, always request your credit report and make sure everything is in order. If you happen to find any inconsistencies, contact the credit agency immediately and demand that they correct the inaccuracies. Many have been denied loans just because a credit agency employee had made a mistake.
Avoid Trading Loan Length in exchange of Lower monthly payments
Unless you really cannot afford the loan installments, refrain from extending the length of the loan. It is best to get lower monthly payments by agreeing to a lower interest rate than to get them by adding to the number of outstanding monthly payments.
Extending the loan length may solve your current cash flow problems by reducing your installments, but will increase the overall cost of the student consolidation loan turning it into a bad deal.
It is best to cut on your expenses for a little while till your income increases than to consent on many years more of annoying debt.
Why Student Loan Consolidation? Due to the rising cost of higher education, a large number of students have been forced to finance their education by getting student or education loans. While student loans are easy to get and come with the cheapest rates of interest, paying them off is not so easy for the vast majority of students who find themselves facing mountains of student loan debt.
People generally find it tough to pay back student loans because the loan installments are not calculated keeping in mind other types of student loan debt. Most students also accumulate a number of other loans like huge credit card bills and car loan, which also require financing upon graduation. The best way of getting out of this kind of debt trap is to go in for student loan consolidation. A student loan consolidation program can be a lifesaver for a student and can totally turnaround a negative student loan debt situation to one of good fortune.
There is no logical reason not to seek out student loan consolidation. By finding a student loan consolidation program that meets their personal student loan debt needs, students can avoid defaulting on payments which will leave a permanent red mark on life long credit history. This would make it difficult to get any kind of financing when necessary in the future. On the other hand, by undertaking student loan consolidation, there is the opportunity to easily reduce student loan debt or in some cases eliminate the student loan debt while obviously at the same time streamlining finances and budget. Most student loan consolidation programs also offer credit counseling, which will help you in managing your finances wisely in the future.
The student loan consolidation company pays off all of the student loan debt. This means that the student loan consolidation program payment will be the only payment obligation and can be paid off in easy monthly installments. Students have the option to pay back student loan consolidation charges over a period ten to thirty years. With student loan consolidation, student loan debt has been reduced or eliminated with future obligations becoming due at a time when more earning power is likely. To apply online for student loan consolidation where student loan debt lenders compete and where students can lower their monthly student loan debt payment up to 70 %, students visit: Studentdebtconsolidationprograms.com
Student loan consolidation programs are presented with the goal of reducing student loan debt with students in mind.
