Consolidated student loan
There are a number of students who opt for loans these days to complete their education.This is because of the increasing cost of education.However, when it comes to paying back these loans then it can be a pain in the neck.Are your payments towards your student loan driving you crazy ?If you are finding it difficult to pay off your student loans then you can opt for a student loan consolidation.
Taking a student loan can not only help you in making the payments simpler but can also help you in making the payment more manageable and also lower your monthly payments.All types of student loans can be consolidated either under federal student loan consolidation or private consolidation loans.
How does this work?
When you opt for a consolidated student loan then it can broadly be divided into two categories : the Federal student loan consolidation and the private student loan consolidation.
The federal student loan consolidation is assisted by the U.S.Department of education and comes under the Federal Student Loans Aid Program.This loan has low qualification criteria and at times even approves international students also.
The private consolidated student loans are funded by, private banks and financial institutions.These loans are provided at a higher interest rate as compared to the federal student loan consolidation.
The student loan consolidation basically combines all your existing student loans into one loan so that you can manage your finances.This loan is provided at a comparative lower interest rate as to what you are paying at present on your student loans.Moreover, you are required to make single lower monthly payments and this can help you save a lot of money.
Federal student loan consolidation
When you opt for a federal student loan consolidation then you can club together all your eligible student loans into a single loan with one lender.To be eligible for this consolidated student loan your loan is required to be in the repayment or the grace period and you cannot be attending school.
Parents who have taken a Federal PLUS loan for their children are also eligible to consolidate their loans.This is possible when the loan is disbursed fully and is in the repayment period.The federal PLUS loans can be consolidated even if the student is still attending school . However, along with this you cannot consolidate other federal student loans.
Advantage of federal student loan
The federal student loan has a number of advantages
associated with it as compared to the private student loan consolidation.Some
of these advantages include:
- There is no fees and no cost related to this loan
- You can lower your monthly payment easily that too at a lower interest rate than the combined rate that you are paying at present on your federal student loans
- There are no co-signers required for this loan
- There are no pre-payment penalties and you have a fixed interest rate
- While giving out these loans there is no credit check carried out
- The repayment period can go up to 30 years and you can have simpler payments options.
Paying of the federal student consolidated loan
Payment of the consolidated student loan is made easy keeping in mind the condition of the graduate who would be either looking for a job or has just got employment.There are basically four payments options available with the federal student loan consolidation namely :
Standard repayment plan: You pay a fixed amount every month till you pay back the entire amount.
Graduate payment plan: You have initial lower payment usually towards the interest and slowly the payments increase as your financial condition becomes stable.
Income sensitive repayment plan: The payment is based on the gross monthly income and amount that are supposed to pay.The payments change every year in this plan according to your income .
Extended repayment plan: The payment is extended over a maximum duration of 25 years.Payments can be either made similar to standard or graduate plans.
Private consolidated student loan
If you have taken a private student loan in addition to the federal student loan or you have just take a private student loan then you can opt for the private consolidated student loan.
This loan also works in the same way as the federal loan consolidation however there might be strict qualification criteria and additional costs associated with these loans.
Consolidated student loan lenders
Some of the lenders that provide these loans are mentioned below:
HELP Loans:
They help you consolidate federal student loans.Contact them at Higher Education Loan Providers, P .O.Box 43737, Phoenix, AZ 85080, phone : 1-800-831-8159
Sallie Mae:
They help you consolidate both federal and private student loan.Contact them at Sallie Mae Servicing, P .O.Box 9500, Wilkes-Barre, PA 18773-9500, fax: (800) 848-1949, Toll free: (866) 380-5005 (private loan consolidation), Toll free: (866) 457-6918 (federal loan consolidation).
Ed FED:
They consolidate federal student loans.Contact them at (800)-821-5659.
A consolidate student loan should only be taken if you have multiple lenders and it is becoming unmanageable for you to make your payments on time.Moreover if there is not much time remaining or amount remaining to be paid on your student loan then consolidation is not a good idea.Usually lenders have a requirement of at least $7,500 to be paid for giving consolidated loans.It is important that you keep all these considerations in mind when applying for consolidated student loans .Other Articles
