What NOT to Do when consolidating your student loan

There are a great many benefits to consolidating your student loan , such as the convenience of making one or two monthly payments as opposed to six or seven, as well a lower monthly payment. But to take advantage of the perks of consolidation, there are some things not to do:

1. Consolidate federal and private together. While it’s not possible to involve your private loan in a federal loan consolidation, it is theoretically possible to involve your federal loan in a private consolidation. But that doesn’t mean you should. Such a consolidation would do away with many of the benefits of federal consolidation, including better interest rate and forgiveness options. Always consolidate your federal and private loans separately.

2. Consolidate if you are close to paying off your student loans. If you only have about a year or two worth of of student loan payments, you may be better off not consolidating. In that instance, consolidation will simply spread out your federal and private loan payments with the possibility of more interest.

3. Consolidate if you are asked to pay a fee up front. Some private lenders may have consolidation fees, but not for federal.

Tips on Getting the Best College Loan Consolidation Programs

For students who believe that when it comes to finding the best college loan consolidation programs should be done by themselves, it should be emphasized that comprehensive research should be done to ensure a successful search. Loan programs are products that one should be dealing with carefully as it can improve or deteriorate the financial status of a borrower. Therefore, all possible means should be exhausted in order to find the consolidation program that is most appropriate for his needs.

The internet is one reliable source of college loan consolidation programs. Just enter the phrase on the search box of a major search engine and viola! You are provided with a seemingly endless list of programs. Surely, the sheer number of sites can be overwhelming. But then, this list is just the start - you now have to somehow create a shortlist of sites that you think can possible provide you with good student loan consolidation program.

It will certainly take you quite some time online as you need to compare different types of programs, their pros and cons, advantages as well as disadvantages. In order to get more information about a particular student debt consolidation program, you may try contacting the lender, via its contact information. There are some who will respond ASAP, others will take their time to reply and others still will simply not respond at all. Of course, prompt response shows the reliability and efficiency of a lender, and so those who provided immediate reply should be greatly considered.

Likewise, students should be wise to organize all information and data about the college loan consolidation programs that they gather. All benefits and advantages as well as disadvantages should be carefully listed and written; they will be the basis of the prospective student borrower when finally deciding on which program he will get.

COLLEGE LOAN CONSOLIDATION

A college loan consolidation could be the answer for anyone who is struggling to find a way out from under mounting educational debt. Some lenders claim that students who borrowed to cover the cost of higher education might be able to cut monthly payments by as much as fifty percent. Careful research and comparison could yield interest rates that are both reasonable and fixed. Some online lenders offer the opportunity to apply via the Internet and charge no application or origination fees. One reason that monthly payments are significantly lower with these loans is that the financing is extended over many years. Some financing can continue for up to thirty years. These lenders frequently do not require credit checks or co-signers. Both students and parents of students are eligible to apply for this financing. A consumer should do careful research before moving forward with many of these lenders. Some student debt already carries extremely low interest rates, so the expense of refinancing at a possibly higher interest rate may not be such a good idea. But the borrower who has multiple loans may find a college loan consolidation to be the best way to pay off education related debt.

Student financing can come in the form of federally insured loans as well as private financing. If a graduate has financed an education with federal funds, those funds can be consolidated through a federal college loan consolidation program. The interest rates for these loans are usually fixed. For many former students who are in the process of beginning a new life in the work force, the ability to refinance multiple loans and combine the costs of all the loans into one can provide needed relief from crushing monthly payments. Creating a more manageable way to deal with this debt can make life much easier and possibly even increase personal credit scores. The standard repayment plans on original student debt generally stretch out over ten years. But since many university educations can cost as much as a small mortgage, a thirty year option does not seem unreasonable. The ability to make larger payments than are required can be another benefit of this form of financing. An additional benefit to federal college loan consolidation might be found in the fact that there is generally no penalty for early pay off.

The more flexible options associated with repayment using college loan consolidation programs has made them an attractive option for graduates who are struggling with educational debt. Many lenders offer a faster turn around time on these refinancing opportunities, some boasting a turn around time of as little as thirty to sixty days. Collateral, co-signers, and in some cases, even employment are often not necessary to qualify for this financing. An outstanding educational debt of more that ten thousand dollars is a prerequisite for attaining one of these loans. The interest rates for this financing may be calculated based on a weighted average of the rates that the debtor is currently paying on their existing loans. This average is rounded up to the nearest 1/8 of one percent. Standard federal student loans will usually have a six month grace period following graduation. For many borrowers, applying for college loan consolidation during this six month grace period can result in significant savings. Waiting until this grace period has passed may increase interest rates on any kind of refinancing by as much as six tenths of a percent.

The types of financing that are eligible for college loan consolidation include subsidized and unsubsidized Stafford loans as well as loans that come under the headings of HEAL/HPSL, Parent PLUS, Perkins, and nursing school loans. If a student has already consolidated loans from an undergraduate degree and wishes to refinance again including debt that was accumulated earning a graduate degree, this can be done as well. However, it is not a good idea to consolidate federal student debt in combination with private student debt. This is because the rules that apply to private educational financing differ from those that apply to federal loans. Other types of debt including credit card debt and automobile financing also can not be included in to any kind of federal educational loan consolidation plan. At one time it was possible to consolidate the educational debt belonging to two separate borrowers into one loan as long as those borrowers were married. Unfortunately, this is no longer the case. The Bible discusses the importance of allowing good to prevail. "Be not overcome of evil, but overcome evil with good." (Romans 12:21)

Private educational funding can be consolidated as well, but certain regulations that apply to federal financing do not apply to private debt. For example, it is not possible to defer payments on a private college loan consolidation if a borrower wishes to go back to school or in the event of a financial hardship. Private educational funding does not allow for tax deductions on interest paid. Loan forgiveness for graduates who apply for federal refinancing and choose certain career paths is not available for private refinancing. These career paths include teaching in economic development zones, certain federal volunteer programs, and military service. In the event of the borrower's death, federal loans are forgiven. This is not the case with private financing. The borrower's next of kin must assume the debt. Another difference between federal and private financing is the interest rates. Private educational lending opportunities often come with variable interest rates rather than fixed.