Consolidating Student Loans Has Never Been Easier

Consolidating Student Loans Has Never Been Easier

by Tim Croy

With tuition costs on the rise, students are using specialized loans to help them with costs. Once graduated, students may find themselves in more debt than they can financially stand. Fortunately, large banks and financial institutions recognize the problem and offer consolidation options for these cases. If you're wondering how to consolidate your student loans, then follow these easy tips:

* Find out what your credit score is and what your credit history is like. A credit score is crucial in getting a good deal on a loan. A higher score will generally get you better rates and give you more options. With a low score, you can still consolidate, but obtaining a favorable loan may require more work and research on your part. To avoid getting tricked into taking out a loan you don't need, know your credit score beforehand.

* Visit one of the many student loan consolidation calculators on the internet. This will allow you to see how much you can potentially benefit from consolidating your loans. Once again, knowing more beforehand will allow you to make sound decisions later.

* Consolidate federal loans before private or alternative loans. The rates and terms for federal loans tend are usually much better, and not as dependent on your credit score. This can save you a lot of money.

* Once you've consolidated your federal loans, start consolidating your private and alternative loans. The best way to start is to consult a loan counselor at your local financial agency. They can give you consolidation options as well as inform you on what the current rates and terms are.

* With the current rates and terms in mind, start looking for a loan. The best place to start is the internet, since there are may different banks offering their consolidation services. Using your credit score, loan calculators, and free consultations, compare each offer. Keep in mind the rates, terms, monthly payments, and any additional fees each loan features. Once you've taken these all into consideration, decide which loan works best for your needs.

* If prepare yourself with the right knowledge, consolidating your student loans is actually pretty simple. You just have to be sure to carefully read all of the terms and conditions, and calculate your total payoff after interest. Sometimes lenders will entice you into loans with higher interest but lower payments. Although the lower payments may seem appealing, the fees and finance charges end up being more expensive in the long run.

With reasonable debt management principles, paying off your student loans isn't nearly as much of a hassle as it once was. Good Luck!

Consolidate Student Loans

Consolidate Student Loans

by Steven Loren

If student Loan debt is a heavy monthly burden on you or your family, you are not alone. And if the monthly payment is becoming so unmanageable that you may have already missed payments or be in danger of default, then loan consolidation may be right for you.

A consolidation loan is just what it sounds like. With a loan consolidation program your high interest student loans are combined into one sometimes lower interest loan, with one lower monthly payment, that you need to make to only one lender.

Consolidation Loans are much like the same idea of refinancing a mortgage, or taking a home equity loan to consolidate credit card debt or pay off other high interest loans. Just about every kind of Federal Student Loan qualifies for loan consolidation including; FFELP, FISL, Perkins, Health Professional Student Loans, NSL, HEAL, Guaranteed Student Loans and Direct loans. In some instances loan consolidation is even available for private education loans as well. Loan consolidation is offered for student loans for either graduate or undergraduate schools.

Interest rates on consolidated student loans are calculated by taking a weighted average of the loans being consolidated, and are then rounded up to the nearest 1/8 of a percent. The new interest rate cannot exceed 8.25%.

So for example let's say that a student has a couple of Stafford Loans that were originated on or after July of 2006. The fixed interest rates on these loans would be 6.8%. If only these loans are consolidated the new resulting interest rate would be 6.875%, a statistically insignificant increase, but the student would gain the advantages of only having to pay a single lender, and often gets extended time for pay back.

In the case of consolidating mixed loan products, like say a combination of Perkins Loans and Stafford Loans, the resulting interest rates will always wind up somewhere in between. The weighted average will give you interest rates that are lower than your highest rated loans, but that will also be higher than your lowest loan products. So again the overall increase or decrease in your interest rates will be negligible - the true advantage of loan consolidation is not necessarily in lowering interest rates, but in actually lowering monthly payments, and extending the term of your loans, making your student loan debt more manageable, and less likely to result in default.

Keep in mind the other advantage to loan consolidation is that there are no fees or costs associated with consolidation, ever. If any service is charging any kind of upfront fees for loan consolidation, they are likely a scam and should be avoided.

Student or parent borrowers can apply for a consolidation loans, however parent loans cannot be combined with the student borrower loans, only loans to the same individual can be consolidated. But of course a parent borrower and their students can consolidate their own loans separately.

Even loans that are in default but with satisfactory repayment arrangements, may qualify for loan consolidation.

Consolidate student loans for as low as 4.5% from How to Pay Student Loans

Procuring Student Loans

Procuring Student Loans

by Adam Heist

Attending a college or a university is not as simple as it seems. Higher studies are something that involves great expenditure, and frankly speaking, average American needs to stretch his/her budget very greatly in order to cover the expenses. In a survey by the college board itself, the estimate of annual college expense - including tuition fees, room and boarding and incidental costs - comes to an astounding figure of $11,000 for a two-year college and $14,000 for a four-year college. If the college is private, then the costs could reach astronomical highs of $30,000 on an average per year. And to top it all, there is an inflation rate of 5-8% per year.

Solving this financial problem often becomes the focal point of student life. This is the reason why the government has come up with schemes to offer loans to students who wish to pursue higher studies. Federal aid has become today one of the largest pools of finance for students in the US. There are $67 billion available for handing out as loans to students to further their educational qualifications.

But there are many factors that determine whether or not a student gets a federal loan. The student is needed to fill out various applications, and then he/she would be granted the particular amount of money for the coming year. The requisites to get such a loan are a high school diploma, admission in a registered college for a stipulated number of days, maintaining a GPA in the classes, and being an American citizen.

The federal Stafford loan is perhaps the commonest of the federal loans available to American students today. This loan is also one of the easiest when it comes to repayment; the student needs to begin paying back only after six months of getting the graduating degree. Subsidized loans are the second-most popular types. These loans are given according to the financial needs of the student. The student requires to be enrolled for at least halftime in college. Contrasting with these are the unsubsidized loans, which are not dependent on the financial needs of the students. Parents are required to pay a certain amount of the loan within a given period of time.

Campus-oriented programs are also a source for obtaining loans. These could be given by the university or college themselves, in the form of grants or loans. The advantage of these loans is that they allow the student to work on the campus and hence return a portion of the loan while studying itself. These loans are dependent on the needs of the student. Such loans also make a student eligible for federal Perkins loans.

To apply government loans, the FAFSA website can be used. March is the month when fresh applications are entertained. Once the application is done, the processing of the loan would begin, which would include finding out which loan the student is eligible for. The options available to the student are put before him/her, which could be accepted or rejected by the student.

Students attending a university can also apply for private loans. These loans do carry higher rates of interest than federal loans, but they also provide more finance. The student needs to hunt a bit more for private loans, as regards lower interest rates.

Federal and private loans are the two main solutions for the problem of financing student courses. One more hidden advantage of getting such type of financing is that the student does not need to bother about inflation in the successive years while the course is underway.