Student Or Random Loan Consolidation

Student Or Random Loan Consolidation

When your student loans get the best of you and you're wondering how you always come out from under all that debt, take a look at the consolidation of bad loans to the account. It may be the answer to a number of problems.
Turn to Sallie Mae loan consolidation for a way to pay your federal student loans, improve their finances and put a little extra money in your pocket each month. The Sallie Mae loan consolidation replaces the existing multiple student loans with a loan, usually with an interest rate considerably lower - as low as 4.75%. The difference of a few percentage points can make in monthly payment amounts can mean the difference between scraping to pay bills and actually having a little extra money.

It is not uncommon for a borrower to obtain a fixed interest rate which corresponds to 0.6% below their current rates. Under federal regulations, calculating the interest rate on a consolidated loan disbursed on or after 1 July 1994 includes the weighted average interest rates of loans of the old school that is building the new, rounded the next one to eight percent. Interest rates fixed for aconsolidated loan can not exceed 8.25 percent.

Each July 1, interest rates on federal student loans are subject to change according to the annual fluctuations of short-term federal securities, and with them your monthly payment. One of the benefits of loan consolidation at Sallie Mae is that the interest rate is locked in the loan. While interest rates may be lower for some years, when caught in an interest rate at least your payments will be predictable and not get up in years when interest rates do.

The Sallie Mae loan consolidation also offers the opportunity to increase the duration of the loan. The longer you have to pay, the lower the monthly payment will be. Remember though, lengthening the life of your loan may mean paying a higher total amount over time.

The online application for a loan consolidation at Sallie Mae is free, no charges and no credit checks. A few minutes of your time can make smaller monthly payments and better credit ratings, when Sallie Mae loan pays their old student loans, your credit report reflects those paid off debts.

Things happen in life and sometimes in a crisis, student loan payments were not made on time or at all. If you have completed your deferment and forbearance options on current loans, consolidating your debt into a Sallie Mae loan may mean a fresh start and a clean slate. If you are facing a situation where the cessation of one or more of your current loans is a very real possibility, acting now to take advantage of the consolidation of a Sallie Mae loan can save many problems and help you out of a stressful situation.

If you decide that a Sallie Mae loan consolidation is what you want, there are four options for payment plans, the Basic Plan, the Extended Repayment Plan, Graduated Repayment Plan, and Income Contingent Repayment Plan.

The Basic Plan offers fixed monthly payments, but the life of the loan is limited to 10 years. The Extended Repayment Plan also offers fixed monthly payments, but extends to more than 12 to 30 years, depending on the total amount borrowed, which reduces the amount of monthly payments. The Graduated Repayment Plan also spreads payments over 12 to 30 years, but the monthly payments increase every two years.

The income contingent plan establishes a payment that is calculated on your gross annual income, family size, and total consolidated loan debt, calculated over a period of 25 years to pay.

A Consolidation Loan Sallie Mae may be the best option for you, but be sure to explore your options thoroughly to make sure you get the best loan for your situation.