The Basics Of Student Loan Debt Consolidation

You can consolidate your federal student loans too, but make sure that you do not consolidate both your federal student loans and private student loans into a single student loan debt consolidation program. Just as other debt consolidation loans, you must make your student loan debt consolidation payments to a single lender, who further disburses to your old creditors.

To go for debt consolidation of your student loans, your minimum balance should be $5,000, and you must either be in the six month grace period after your studies, or are already repaying your student loan.

Before selecting your student loan debt consolidation option, review all the advantages and the disadvantages:

• Through debt consolidation you make your student loan payments to a single lender.

• Depending on the balance of your loan amount, your consolidated student loan has an extended repayment term from 10 to 30 years.

• When negotiating with your bank or financial institutions, ensure that your phased repayment plan allows you to easily meet your monthly payments and have a good credit rating, at the same time.

• The rate of interest for student loan debt consolidation is capped at 8.25 percent for federal student loans.

• Once the rate is fixed you cannot take advantage if the interest rates fall in future.

• There are no fees charged for student loan debt consolidation.

• Once approved, you cannot undo your debt consolidation of your student loans as they have already repaid in full to your previous creditors, and they no longer exist.

You can still obtain debt consolidation for your over due, or unfulfilled, student loans if you negotiate a satisfactory repayment plan with your bank, or debt consolidation lender. Married couples, too, can consolidate their individual student loans together. This is regardless of how much each owns before consolidation, and must now agree to pay the consolidated amount.

Student Loan Consolidation Advice

Student Loan Consolidation Advice:

Unpaid student loans can lead to a real financial disaster if not managed properly. Student consolidation loans are an effective debt management strategy highly beneficial for both students and lenders.

The term 'consolidation' is a misnomer in case of student consolidation loans. In reality, none of the loans are consolidated. In case of student consolidation loans, all the existing debts of the student are paid off by the lender. Now the student is left with a new loan with a new interest rate and new repayment plan. Apart from the advantages, student consolidation loans are associated with certain pitfalls and need to tread carefully.

The most significant advantage of a student consolidation loan is the longer repayment period of up to 30 years. Interest rates are also low and the student is required to pay less towards monthly payments. However, the negative side of this arrangement is that extending the loan term will increase the amount paid towards interest.

All student loans include a grace period of six months after which the loan repayment actually begins. This grace period starts once the student has completed his/her studies and is in the job market. Interest rates on student loans tend to increase once this grace period is over. Hence, students willing to consolidate their loans should opt for the same during the grace period.

Another advantage of a student consolidation loan is that one does not bother about maintenance of bills or multiple payments. Only one single monthly payment has to be made to a single lender.

According to the federal law, if all of the borrower's existing student loans have been obtained from one single lender, the borrower must make the first request to the same lender for a consolidation. If the loans are present with multiple lenders, the borrower may contact any of them or any other private lender for a loan consolidation.

Student Loans

Student Loan Consolidation Centers:

A student loan consolidation centre allows you to combine several types of federal student loans with various repayment schedules into one loan with one monthly repayment.

It is best to search for loan consolidation centers which offer minimal rates of interest. A student is qualified for a maximum of 1 percent reduction on the interest rate, if he pays on time for thirty six consecutive payments. While still attending school, students having federal direct loans are able to consolidate by means of the federal consolidation program provided by the government.

Most student consolidation loans fall into two categories. They are government student loans and private student loans. Student consolidation loan centers provide loans such as federal, Stafford, professional student loans, nursing student loans etc.

The government loan consolidation centre is providing a student loan consolidation program which allows students to consolidate outstanding education loans into a single new loan. This is not limited to a single lender. Even if multiple lenders hold the loans, one can still opt to consolidate. Two popular online student consolidation loan centers are Internet student loans centre and US student loan consolidation centre. Next student is another popular student loan consolidating centre. It is offering student loan payments lower by up to 60% or more. Sallie Mae loan consolidation centre offers federal consolidation loans. The Citibank student loan corporation is giving federal and private loan consolidation. Wachovia consolidating loan centre is giving federal Stafford loans.

Students must only consolidate loans which are of variable or changing rates such as the Stafford Loans. Never consolidate on fixed-rate loans such as Perkins loans as there won?t be any financial benefit. Interest rates for college students who are already adults or on their way to sixth month grace period will be higher.

Student Loans

Student Loan Borrowers Save More with NextStudent’s Consolidation Program:

Student borrowers who may have missed the July 1 deadline to consolidate their student loans before the interest rate increase need to know they still can consolidate at low rates especially if students are in their grace period. NextStudent, the Phoenix-based premier education funding company, advises students with federal Stafford loans issued prior to July 1 to consolidate today and automatically receive a .6 percent reduction on already low rates.

Federal student loan consolidation bundles together all of a student borrower’s loans into one easy, manageable monthly payment. Savings over the long term can add up to thousands. NextStudent’s benefits and incentives bring down interest rates even more. In addition, with federal student loan consolidation there are no charges, fees or prepayment penalties.

Lower Rates in Grace Period:

For student borrowers who had student loans prior to July 1, 2006, the initial interest rate on loan consolidation with a .6 percent rate reduction while in grace period is 6.625 percent, as opposed to the new repayment rate of 7.25 percent on student loans. The 6.625 percent rate can be reduced with NextStudent’s aggressive incentives:

• An interest rate reduction of .25 percent for student borrowers when they sign up with Auto Debit and have their payments deducted automatically.

• An added interest rate reduction of 1 percent that is locked for the life of the loan following the first 36 consecutive on-time payments, OR an interest rate reduction of 2 percent following 48 consecutive on-time payments.

It’s Easy to Apply for Consolidation

By bundling together all of a student’s loans and extending the repayment period, borrowers save time and money over the long term. Depending on a borrower’s balance repayment can be extended as long as 30 years. In addition, NextStudent offers the advantage of various options on repayment, including graduated repayment and income-sensitive repayment. There also are deferment and forbearance options available.

As consolidation rates are much lower than current student loan rates, now is the perfect time to consolidate and save money. Applying for NextStudent’s federal Student Loan Consolidation program does not take much time and easily is done online. NextStudent’s application is hassle-free and can be completed in four easy steps with Electronic Signature. There is no need for a co-signer and there are no credit checks. Student borrowers do not even need to know the details of their current student loan portfolio.

Now is the perfect time for student borrowers who missed the deadline to consolidate the student loans they had prior to July 1, 2006. By consolidating before the end of the grace period student borrowers can receive a low interest rate and sign up with NextStudent for other aggressive incentives to help them save even more over the long term. Student loan consolidation can rid borrowers of too many unwanted monthly bills and help make life easier and less expensive.

NextStudent believes that getting an education is the best investment you can make, and it is dedicated to helping you pursue your education dreams by making college funding as easy as possible. Learn more about Student Loans at http://www.nextstudent.com/.