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Student Loan Consolidation – Designed to Make Life of Borrower Easier
Student loans indeed have a great effect in a student borrower. And as you stay longer in college, the more the number of loans that you acquire, making things more complicated. An effective means by which these student debts may be controlled is by way of student loan consolidation programs.
Designed in helping the borrower take charge of his financial life, the student loan consolidation programs are indeed very popular solution to your financial concerns. To cite, if you have multiple loans that has different interests and payment dates, with merging, you have a new loan that has a fixed interest rate and even low payments every month.
Such program makes life simpler for the borrowers as they are able to better manage their college loans. With a single loan, late or non payment of loans becomes non-existent. And so consequently you are given the chance to make better your credit ratings.
Consolidation, indeed, reduces the installment every month as you are allowed to stretch your loan period up to thirty years, unlike the previous loans which has terms lasting only up to ten. Imagine how your life would change once you consolidate and your multiple monthly payments are replaced by a single low monthly installment.
When it comes to benefits, one not only enjoys the paltry payment (compare to previous payments) and low rates of interest. Student loan consolidation programs likewise offer the borrowers a number of options on debt repayment. Such plans include graduated and standard repayments as well as the extended and income contingent repayment plans.
Such plans are designed for borrowers to enjoy great flexibility in the repayment of his debt. More so, the borrowers can be able to switch from one plan to another, depending on how they perceive a plan can help time. The best thing of all is that one can avail of student loan consolidation programs without shelling a single dime as such programs are free.
For more student loan consolidation and loan refinancing articles, do visit us at Student Loan Refinancing for You blog.
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Help answer the question about student loan refinancing
Is there a new rule (or law) about refinancing under 20,000 in student loan debt that happened on Oct 1?I started doing a refinance of my student loans prior to Oct 1 but there been a lot of "needing more information" because of thier mistakes and the company is starting to really make me angry.
I wanted to cancel the application and start over. They said if I did that I would not be able to refinance because I have less than 20,000 in debt and the rules changed since Oct. 1.
I just want to know if it is a government mandate or this companies'?
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If student loans start out as variable rate loans, they cannot currently be refinanced into a fixed rate student loan. Rules have been changing back and forth on if student loans are fixed or variable, so your confusion is understandable.
You could try balance transferring the student loan onto a 'fixed for life' credit card rate. You might be able to save a few points in interest this way.
If your credit is stellar, you may be able to get a fixed rate personal loan from your bank or credit union. Most of the time, personal loans are variable rate, though.
If you own a car or a house with at least $8k in equity, you could refinance one of those.
Things to watch out for if you do this:
- Any fees attached to the new loan (BT fees, closing costs, etc.)
- Penalty rates that could apply if you miss a payment
- Student loans have some good points that other loans don't – namely the ability to forego payments if you lose your job or go back to school, and student loans are forgiven if you die or become disabled. You will be giving up these features if you transfer your student loan to another loan.
Nope, sorry, but personal loan won't qualify, as you will have nothing in writing to say that it is student loan interest.
If you are consolidating federal student loans, the interest rate is set by the government, so all consolidators will offer you the same rate. They differentiate themselves by what they call "borrower benefits", which can include things like a percentage reduction if you pay a certain number of months of time, or if you use direct deposit.
It's important to stick with a company that's been around a while and will be around to service your loan. Lots of these companies just get you to fill out an application and then they "flip" it by selling it to another company.
Sallie Mae is the largest and oldest consolidator. They have a lot of info on the site, including an FAQ and a calculator so you can see what your payments will be.
http://www.salliemae.com/after_graduation/manage_your_loans/consolidate_student_loans/student_loan_consolidation.htm
Good luck!
Right now, just about all private loan consolidation has ceased because of how student loans are right now, and some lenders have even stopped offering their loan products all together. You'll just have to wait until things start getting better to consolidate. You could always see about getting a personal loan to payoff your student loan to get a lower rate. Other than that, you really do not have any options.
i work for a consolidation company.
first of all the only thing that changed Oct 1 are the interest rate reductions, before you could get at least 1.25% off, now you can maybe get a .25% off. That whole thing about the 20,000 is probably the companies minumum balance to consolidate. after you sign a consolidation application you have 60 day appox. to cancel, once the debt is paid or "funded" you cant cancel, so I would get there fax number asap and fax in writing that you want the application cancelled.
what the goverment mandates are things like the intrest rate, when you are eligble to consolidate things like that.
The company I work for is Academic Financial Solutions, if you want to give us a call we will be happy to consolidate the loans for you and answer any other questions you have.
866-416-6333
http://www.academicfinancial.com
-good luck
athena
Yes, there are advantages to consolidating your student loans. Instead of making several payments a month, you will be making a single payment, and it could mean more money in your budget for other things. Also, you could extend out your payments in order to make it fit your budget. However, I do not recommend consolidating your student loans until the 6 month grace period is almost over because in some cases, it will end your grace period. The only bad reason not to consolidate your student loans is if you qualify for a loan forgiveness program in either the teaching or medical professions because some loan forgiveness programs will not handle consolidated loans. Good luck!
Student loan interest is often deductible, rates are generally very low, and they're often for extended periods of time. The longer you have to pay it, the cheaper those payments become over time.
I almost NEVER recommend paying off student loans with mortgage debt. I don't care if it saves you another $50/mo. It's just not a good idea. Unless for some reason you're at some stupidly high rate on those loans? Anything over 9%, I'd consider it. Anything under, not.
Yes I do know a place, I just got a loan myself
It depends. Your score may go down for a few months, because you'll have a new loan on the report and passed due debts will still show up on your report. After a few months, it's going improve.
Or it can go up, depending other factors.