Consolidate Student Loans

According to a College Board Study done in 2008, two out of three undergraduates who graduate successfully from college have some form of student loan debt. The reality of paying back this loan amount truly kicks in when you graduate, and you come face to face with this fact that you've to pay several loans all with confusing dates and payments. To make the process less complicated, many people choose the option to consolidate student loans. By consolidating student loans, you may end up with two consolidated student loans: consolidated federal loans and consolidated private loans. Unfortunately, it can't be made simpler than this as private loans can't be successfully consolidated with federal loans. The process that should be followed to consolidate student loans is to take care of federal loans first and then move on to the consolidation of private loans.

Federal Loan Consolidation
The key advantage of consolidating federal loans is the extension in payment plan. Your payment plan may increase from ten years to thirty years with less payment each month. There are no fees for federal loan consolidation and penalties for paying back your loan earlier. Also, there are great chances that you may end up with a lower interest rate.

Private Loan Consolidation
The way to go about to consolidate private student loans is to meet up with financial organizations specializing in this venue. The trick is to choose those with variable interest rates, no origination fees, and no prepayment penalties. Prepayment penalties shouldn't be there as there are chances that you may end up with a great job and want to pay your loan back earlier than the agreed payment plan. The advantages of private loan consolidation are that you end up with a single private loan with a longer payment plan, which means less payment amount per month. Moreover, consolidated student loan rates may be lower than the rates at which you took out the initial loans; this is because your credit history may have improved while being in college and after graduating, and also by getting a good job.

Frequently Asked Question(s)

Q:How does debt consolidation for student loans work?

A:When the students graduate, they get to know that there are loads of loans that they need to repay, all having different confusing deadlines. To make the process easy for them, there is the option of debt consolidation for student loans. Through consolidation, the students can break down their repayment process into federal loan repayment and private loan repayment.

Q:What can you tell me about the consolidating school loans option?

A:Consolidating School Loans is one of the best way out for students who have withdrawn loans from various sources and are caught up in different time spans, loan due periods, installment timings and payment, and various other issues. Loan consolidation allows students to consolidate all their loans in one loan such that the student has to pay one consolidated payment amount at the end of the month instead of several.

Q:will loan consolidation reduce monthly payment?

A:Loan consolidation extends payment of loans over a period of time; this automatically lowers the monthly amount you pay with a single interest rate. The amount however remains the same and is recommended to be paid off as soon as possible even with extended time. Loan consolidation only combines all loans into one single loan with a convenient monthly payment.

Q:How to consolidate student loans?

A:To consolidate student loans, you need to apply for consolidation at a federal or private financial institution. It is important to remember that federal loans can only be consolidated in federal programs, whereas private loans can be consolidated in in private programs. You must have at least two loans to be eligible for consolidation. Every consolidation program has its own terms and conditions.

Q:what exactally is Consolidate Student Loans Interest Rate all about?

A:if you want to keep your student loan payments to the minimum, then it is crucial to know as much as you can about consolidated student loan interest rate.The interest rates for federal student loan consolidations are based on the over all average of the amount borrowed by the student. interest rates on loans whether institutional or federal or private all fluctuate, however if these rates are consolidated, the student will have to pay a fixed rate on a constant basis.

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