What you should know Student Loan Consolidation

Student Loan Consolidation

What You Should Know

Student Loans can be a heavy burden. Student
loan default rates continue to be high and are a
growing problem. A default on a student loan can
wreck havoc with a young person credit score,
when they are just starting out.

What is Student Loan Consolidation?

Student loan Consolidation can help, not only in
avoiding default but in making monthly payments
more manageable. According to the Higher
Education Act, just about every kind of Federal
Family Education Loan (FFEL) or Direct Loan is
eligible for consolidation. Both undergraduate
and graduate school student loans qualify. There
are a few specific exceptions and these can be
found listed at www.loanconsolidation.ed.gov.

These federal programs make student loan
repayment easier by combining several types of
Federal education loans regardless if they have
different terms, different repayment schedules -
even if they have been made by different lenders –
into one often lower interest loan. In addition,
the monthly payment amount on a consolidated
student loan is usually lower and the schedule of
payments is usually extended to one that is more
reasonable. These features are designed to create
a much more manageable debt and should make
borrowers less prone to default.

Is it Right For Me?
Just about anyone with outstanding student loans
can benefit from consolidation. However you need
to seriously consider it if:

Your Monthly Payments Have Become Unmanageable.
If you are in danger of default, if you have had
trouble meeting your monthly payments, and have
exhausted your deferment and forbearance options,
student loan consolidation should be serials y
considered. There are online calculators
available that can help you determine what you
new payments would be under the various program
available.

You have Multiple Payments to Multiple Lenders.
If you want to avoid the hassles of sending
different payments to different lenders every
month with a Direct Student Consolidation Loan
you wile b making only one payment to one lender
every month

You have Variable Interest Rate Student Loans.
The interest rate for a Direct Consolidation Loan
is fixed for the life of the Direct Consolidation
Student Loan. Interest rates on consolidated
student loans are calculated by using a weighted
average of the interest rate on the loans being
consolidated and have a cap of 8.25%

Should I use a Student Loan Consolidation Service?

Consolidating your student loans through the US
Department of Education is free and anyone can
apply. However if you realize you will benefit
from student loan consolidation, or are seriously
in over your head and facing default, you may
want to consider using the services of a
professional lender that specializes in student
loan consolidation. They have the ability to look
at multiple loan programs available from multiple
lenders and not just the programs available from
the federal government. A professional Student
Loan consolidation company can quickly and easily
assess your situation and match you with a
consolidated loan that is right for you and your
financial situation.

Student Loan Consolidation for as low as 4.5%
from How to Pay Student Loans