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As you are aware there can be several types of student loan consolidation for you. Broadly however there can be two categories. These are Federal Student Loan Consolidation Plan and Private Student Loan Consolidation plan for you. Consolidation is made applicable to both types of loans.
Stafford loans, private and federal, subsidized or not are prime subjects for such student loan consolidation. You can also consolidate the HEAL, HPSL and Parent PLUS loans availed. The PLUS loan includes the federal direct loans, consolidation loans, and direct loans. Other loans that could be consolidated are Perkins Loans and Nursing Schools Loans.
About the federal and private loan consolidation processes
Federal loans as well as the direct consolidated loans cannot be consolidated once again without obtaining or including additional loans. If you have already effected the student loan consolidation in respect of your undergraduate loans you can also add the graduation loans at later dates. Since these are additional loans such loan consolidation shall be permissible.
You may also like to consolidate the private loans you had obtained as student. Never ever try to consolidate federal with private loans that results in private consolidated student loans. Such consolidation will deprive you of many benefits you could obtain with federal loan consolidation process.
Drawbacks of consolidating federal with private loans
Several drawbacks occur when you try to consolidate federal loans with the private loans. Some of them are –
• With federal loan consolidation you can defer payments if you wish to resume your academic career. No such facilities are available under private loan consolidation plans.
• Forbearance despite all economic hardship is not possible in case of private loan consolidation though permissible in case of federal loan consolidation.
• No income tax deductions as in case of the federal loan consolidation interests are available in private consolidation plans.
• You have chances to be forgiven in case of federal loan consolidation that is not permissible under private loan consolidation plans.
• Like federal loan consolidation the military services, working as trainer in the economic development zones etc may not render you for any relaxation under private plans.
• Private loans do not die a natural death in case of your untimely demise. Your heirs and successors in interests would be responsible for repayment.
• Private loan consolidation rates are variable while the federal loan rates are firm and often better.
Federal student loan consolidation should be your first priority
If you are going for college loan consolidation your best bet would be to consolidate your federal loans first. The federal loan consolidation carries the best student loan consolidation rate and will be highly beneficial in financial terms compared to the private loan consolidations. Once you carry out your federal loan consolidation successfully it will boost your credit rating. In result you will become eligible for much better terms and conditions going for the private loan consolidation at a later stage.
Watch the video related to College Loans Consolidation
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Help answer the question about College Loans Consolidation
Companies that still do federal consolidation loans?I've heard that one of the things in the stimulus plan allowed for recent college graduates who are still in the grace period of their student loans (like me) to consolidate at a rate of 2%.
I've tried to look into this more, but I can't even find a bank that still does federal loan consolidation. Do you know of any banks that still do this type of loan? I have good credit scores (756-789) if it helps/matters.
Thanks.
About Author
Albert William has been an expert in the field of college loan consolidation for long. Presently he is the professor of economics in a leading American University and is also one of the exponents on the leading American Channel on best student loan consolidation rates.
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Before any college loan consolidation you need to understand how things work try this site for starters.
http://www.loans.tohelpyou.info/refinance/Refinancing.html
http://www.SSSC.com
I know a few people who consolidated their loans through them and they offered them great rates.
You may also want to try http://www.acs-education.com
Consolidating students loans do not make a difference to the credit expect if you fail to repay them (as you did). I have consolidated and it has worked out fine. I started with a low interest rate and because I paid on time for 36 months continuously my interest rate was dropped an additional 1%. If you can't make all the payments, consolidation is the best way to go and make your life easier. Good luck.
If you fit into the criteria, then you should move ahead to the next step, which is talking to the consolidation company and asking them to contact your creditors to reduce your monthly payments and interest rates. Just as with any other loan, student loan repayment affects your future prospects of loan-taking.
If student loan debt goes beyond eighty-five percent of your total income, it is seen as a negative score in your future credit assessment.
Requirements: As I recall, you must have more than $10,000 in outstanding loans. You must not be in default.
Best lenders: I chose to use the federal government who held most of my loans. You can check nslds.ed.gov for more information.
Sallie Mae consolidates.
The good news is that almost anyone can consolidate their student loans, even with bad credit. The federal government sponsors a program through the department of education that allows anyone to consolidate their federally backed student loans (most typically, they are Stafford Student Loans but could also be PLUS Loans or Perkins Loans) and approval is not credit based by traditional underwriting standards — the key is that you cannot be behind or have missed payments. You also must have graduated and you can only consolidate student loans once (typically) in the term of the loans. The exception to this last rule is that if you take on news loans, then you can consolidate again.
The benefit of consolidating your student loans is that you can lock in a low fixed rate while at the same time extending the duration of the pay-back on the student loans to 30 years… which could cut your monthly payment in half.
If you want to compare rates and terms to consolidate your student loans, you can get matched with several of Bills.com's pre-screened lenders, by applying here: https://www.bills.com/studentloan/loan/
To learn more about student loans, I encourage your to visit the Bills.com Student Loans Information page at http://www.bills.com/student-loans
Hi tludwig.,
The first thing is you need to make sure that you are not in default on any of them, because the Army won't repay any that are in default.
Also make sure that you meet all the requirements. I put a link that describes them below.
Once you're all set there, go to http://loanconsolidation.ed.gov/borrower/borrower.shtml . You can apply right there at the Federal Direct Consolidation Loan site.
Good luck,
Ken
I am in the same boat. No one is consolidating right now because of the credit crisis. If you find someone who will do it please let me know, these $700 a month payments are killing me!