Consolidation of Student Loans - Which Loan is Qualify

Below is the list to help you identify which are the student loans that are eligible for consolidation,

• Federal and Federal Direct Stafford Loans (subsidized and unsubsidized)
• Federal and Federal Direct PLUS SLS (Supplementary Loans for Students)
• Parent PLUS and Federal Direct Parent PLUS Loans
• Federal Perkins Loans
• Direct Consolidation Loans and Federal Consolidation Loans
• Guaranteed Student Loans
• Federal Insured Student Loans
• Auxiliary Loans to Assist Students
• Federal Supplemental Loans for Students
• Federal Nursing Student Loans (NSL)
• National Direct Student Loans
• Federal Insured Students Loans (FISL)
• Federal Health Education Assistance Loan (HEAL)
• Federal Health Professional Student Loans (HPSL)
• Loans for Disadvantaged Students (LDS)
• National Defense Student Loans
• Federal Parent Loans For Undergraduate Students

Since you are now clear of which loans are eligible for consolidation, it is only fair that you know which types of loans are not eligible for consolidation,

• Consolidating federal student and private student loans together
• Previous bank loans
• Personal loans
• Consumer debt loans
• Credit unions loans
• Housing loans
• Car loans
• Or any financial loans you have acquired previously

Please know that the list here might not cover all the loans eligible for consolidation. And as time pass, it is possible that more loans will surface and added to the list. So, you will want to talk the loan agencies to see which loans are eligible for consolidation and see what is the best interest rate you can get.

You can manage your finance,

Michael W.

Stafford Student Loan Consolidation

Among all the loans being offered, Stafford student loan is considered to be the best federal student loan because it doesn't need any credit check because it is protected by US federal government. In fact, anyone who needs help can apply for this federal student loan.

Besides that, the Stafford loan is make available for both graduate and undergraduate students. And it comes in two forms,

Subsidized Stafford student loan

• The government will pay the interest rate for your loan balance as long as you are studying in school.
• Awarded base on your prove of financial need.
• Deferment is allowed if you are qualified.

Unsubsidized Stafford student loan

• You pay for the interest every month once you receive the loan or you can add it to your loan balance which means you don't need to pay for the loan until you graduate.

However, students often find that their loan comes together with subsidized and unsubsidized loans. This means that part of their loan will be subsidized by the government and part of it is not.

In addition to the interest being pay for the Stafford loan, 4% fee is deducted from the loan awarded.

And when you want to apply for the Stafford student loan, you can do it by filling the FAFSA (Free Application for Federal Student Loan) form online or offline. You can also talk to your financial aid office to learn more about the application.

Why consolidate your Stafford student loan

When you consolidate both the subsidized and unsubsidized Stafford student loans, you will be paying interest on a single loan and that can often help you to save money. You can consolidate your Stafford loans during the 6 months grace period or when you start servicing the repayment.

When you are consolidating your Stafford loan, please know that the interest rate fluctuates from current rate to maximum of 8.25% and it changes in July every year. Since the rate changes at July every year, it is best that you consolidate your loans after July.
By the way, some loan agencies only consolidate your Stafford loan when you have a minimum loan balance. If you doesn't qualify for the minimum loan balance and yet need to consolidate your Stafford loan, you can look for Federal Direct Student Loan Program (FDLP) or Federal Family Education Loan Program (FFELP) for the consolidation.

You can manage your finance,

Michael W.

Student Loan Consolidation Programs - The Pros And Cons

Looking at the fact that scholarship and grants are not available for everyone, many students have to take up loans to finance their education and it is common that students will take more one loan to further their education. However, the problems start to emerge when the students graduate and start to service the loans. They have to pay different agencies with different interest rates at different time of the month

That is where the student loan consolidation programs come in. Students can now consolidate the loans into one loan and make a single payment monthly. They can enjoy lower interest rate and possibly improve their credit score when they consolidate their student loans.

But are the programs only do the students good and have no harm? Look below for more information about the programs.

The Pros

• Stretch your money before you can really make money in your job.
• Lower interest rate so you can save money.
• Free you from immediate financial commitment.
• Save time and effort because you are dealing with only one loan agency.
• Follow terms and regulation from one agency only.
• Reduce stress.
• Improve credit score because your multiple loans are considered paid off and you are only taking one loan.
• Further discount on on-time payment and auto bank transfer.

The cons

• There are too many programs out there and it is confusing to choose among them.
• End up paying more when you choose the wrong student loan consolidation program.
• Longer loan period means higher total loan amount at the end of the loan period.
• Might involve extra fees for consolidation.
• Some agencies might need you to refinance or have a home loan to earn lower interest rate.

So, as good as the student loan consolidation programs may seems, they do have some flaws in the system. And since you are more aware of the pros and cons of the programs, you can see that whether going for the student loan consolidation program is what you need.

You can manage your finance,

Michael W.

Different Student Loan Repayment Plans

Going for student loan consolidation is only the first step, you need to know which payment plan suit you the best so that you can manage your loan properly. The student loan consolidation comparison below will show you the features of the different plans available.

1. Simple repayment plan

This gives you a fixed monthly repayment for a loan period up to 10 years. If you are looking forward to settle your loan as early as possible, you should think about this.

2. Extended repayment plan

What if you have other priorities to attend to and you simply can't take out so much money every month? This repayment plan helps you to extend the repayment period to 12 - 30 years and you can also enjoy lower interest rate with this repayment plan.

It might sound a relief to extend your payment with a lower interest rate but when you really do the math, you are actually paying more with this plan. This is because loan agencies have to cover back their cost (low interest rate) by extending the loan period.

3. Graduated payment plan

This plan was designed to start off with lower payment but increases gradually every 2 years. The graduated payment plan shares the same loan period as extended repayment plan and your minimum monthly repayment must be at least $25 or the interest rate offered.

This plan was built for young graduates with lower current income. Its logic is that you will enjoy more income when you work longer in the market. Some believe that this is a riskier plan as you need to constantly monitor your financial situation. Sometime you even need to do a projection for your income in the coming months. If you are unconfident about your future financial situation, it is best that you consider other repayment plans.

4. Income contingent repayment plan

This repayment plan is suitable for you if you have a family and you are a direct loan borrower. Your repayment period will be spread to 25 years and at the end of the loan period, any remaining loan balance will be discharged.

With this repayment plan, your repayment is calculated base on your total student loan, annual income and your family size. And your monthly minimum payment is $5.

5. Income sensitive repayment plan

This repayment plan is similar to income contingent repayment plan with 10 years loan period.

As you can see, there are more things to take into consideration when you are consolidating your student loan. Be it federal or private student loan or choosing among the different repayment plan, you need to look into your need and capabilities before you sign the paper.

You can manage your finance,

Michael W.

Student Loan Consolidation Comparison

Federal loan student consolidation or private student loan consolidation? Which one is better? Below is the student loan consolidation comparison that you should know,

Federal Student Loan Consolidation

• Offered by federal government of USA.
• Is possible to reduce monthly payment up to 50%.
• Accept all federal loans from eligible borrowers which mean that personal loans like credit card, car or mortgages are not accepted and spouse consolidation is no longer accepted.
• Lower interest rate (fix rate) by spreading the loan period.
• 4 repayment plans – simple repayment plan, extended repayment plan, graduated repayment plan and income contingent repayment plan.
• Interest is tax deductible.
• Loans can be consolidated during the studying period.
• Doesn't require co-reference, employment and credit check.
• Eligible for forbearance and deferment.
• Loan is write off when the borrowers pass away and shall not be transferable to the next of kin.
• No fees required to consolidate the student loans.

Private Student Loan Consolidation

• Offered by banks, credit unions and other loan agencies.
• Open to anyone who wants to consolidate the student loans with private sector and who is not eligible for federal student loan consolidation program.
• 4 repayment plans – simple repayment plan, extended repayment plan, graduated repayment plan and income sensitive repayment plan.
• Interest rate fluctuates with the current market interest rate and in can be higher than federal student loans consolidation.
• Interest is not eligible for tax deduction.
• Loan can be consolidated after the education period and the loans are in grace period.
• Next of kin has to service the loan when borrowers pass away.
• Not eligible for forbearance and deferment.
• Depending on the agency, co-reference, employment and credit check is needed.
• Depending on the agency, minimum fees might be required for student loans consolidation.
• Depending on the agency, pre-payment penalties might not be necessary.
• Minimum loan amount is sometime required.

As you can see, there are pros and cons among the 2 student loans consolidation program. It is best that you will talk to the respective agencies to get more details about the program so that you can make a thorough comparison between the 2 programs.

You can manage your finance,

Michael W.

Federal Government Student Loan Consolidation

Since you are reading this, you must be in some consideration of going for federal government student loan consolidation. When you have multiple loans and are going to pay multiple interest rates for the loans, it is only logic that you consolidate the loans into one to make your life easier. It is stressful to carry the heavy loan on your shoulder and seeing a mass your income going to repay the loan is surely not something entertaining.

As the name implies, the loan consolidation program is offered by the federal government. You can then consolidate your student loans such as Stafford or PLUS loan with Federal Direct Student Loan Program (FDLP) or Federal Family Education Loan Program (FFELP). When you have consolidated your loans with the federal government, you can reduce your monthly repayment and probably earn some peace of mind.

Besides that you will be servicing your consolidated loan with fixed interest rate (which will be calculated base on the current interest rate with the different loans being combined together), earning payment incentive (base on the punctuality of your payment over a period of years).

And unlike some student loan consolidation agencies, you can apply for federal student loan consolidation disregard of your loan balance. This is very helpful when you are stuck in an emergency where you are suddenly financially unfit to service the loans.

By the way, since the federal student loan consolidation program is protected by the government, you don't need to reveal your credit history. So, even your credit history doesn't look as good as some other applicants, you can still apply for the program.

The federal student loan consolidation program is also flexible enough that you can choose which loans you want to include in the program. If you are confident that excluding one of the loans can save you some money, you can just go ahead. The program will not penalize you for that.

Looking at the benefits of the federal student loan consolidation, you might be wondering whether you are eligible for the loan. You are eligible, if you are a student who is servicing the loans in deferment, grace and repayment period and never consolidated your loans before.

Now, even though you have consolidated your student loan with the federal government, it doesn't mean that you can leave the loan unattended. And if the federal government does lower the interest rate during this economy turmoil, you will want to know how much you are actually paying for the loan. In other words, you got to be financial savvy to properly manage your loan.

You can manage your finance,

Michael W.

How To Consolidate Student Loans In 3 Simple Steps

Many people don't consolidate their student loans because they thought the process is troublesome and they are not eligible to do it. The truth is, consolidating your student load need not to be difficult. You can summarize the whole process with these 3 easy steps,

1. Get the best agency

There are a lot of companies which are more than happy to consolidate your student loans. And when you are looking for student loan agencies, look for the one that offer various packages that suit your need. Make sure that the package you choose is most manageable for you as a student or graduate.

Besides that, good student loan agencies will often be open about their terms and condition, repayment period, interest rate and etc. You can often access this information online or just calling up the company.

By the way, a good student loan company also won't ask for any charges when you are consolidating your student loans.

2. Form

This might be the part which most people thought as the most troublesome part when consolidating student loans. Although it is a simple form that requires personal details, what annoy a lot of applicants is that the form often needs a reference from you. Actually, that shouldn't be an issue if you are serious about your education. You can ask your tutor as your reference and a lot of them are happy to help.

And when you are filling the form, be sure that you check the terms and condition thoroughly. You want to make sure there is no hidden cost or other terms that don't work to your favor. Once you put your signature down, there will be no regret and no argument can get you out of the agreement.

By the way, you don't need to get your credit check because the federal student loans are guaranteed by the American government.

3. Time frame

Once you have signed the paper, the student loan company will check with your previous student loan companies to verify the total amount of your loan. The verification will usually take 30 days and when it is done, you and the new student loan companies will have to start discussing about the interest rate.

While that is being discussed, your previous student loan companies will start to receive payment from your newly signed student loan company to clear out your loan. And to prevent you from losing money and getting into any trouble, do ask the previous the student loan companies about your loan status. You don't want to start paying the new loan while the old loan companies are chasing you for payment.

You can manage your finance,
Michael W.

What Is Student Loan Consolidation Program And Why You Should Do It?

Looking at the high cost of education nowadays, it is common that students have to take more than one loans to support their college or university studies. But what happen when you graduate? You will have to start servicing your loan and a big chunk of your hard earn money will have go to paying the loans. Isn't there a better way so that you can keep more money with you?

And imagine you have to make multiples payments to multiple companies at multiple interest rates for multiple times a month. It is already confusing when you look at that. You can only imagine the trouble you will experience when you have to actually do it. The loan companies will not accept the reason that you mixed up the payment date when you pay them late.

So, to make your life easier, student loan consolidation program allows you to combine all your outstanding student loans into one where you only make one payment to cover all the loans you have made.

Not just that, there are more benefits when you initiate your student loan consolidation program,

1. Easier management

Just like what you have seen, you only make one payment to every month to repay your loans. You don't need to set different reminders to remind you for the due date and you don't need to worry that you might miss a payment.

And when you make the payment, the loan consolidating company will allocate the right amount of money to pay for the respective loan. It is bad enough that you have to pay back the loans, you can let someone else to deal with the extra work.

2. Lower interest rate

Most loan companies are willing to reduce your interest rate when you make more loans. However, you don't have much negotiating power when your loan is small in multiple companies.

The scenario will be different when you combine all your student loans and joint the student loan consolidation program. Looking at the potential return from your consolidated loan, the loan companies will want your business and the best way to do that is to offer you a lower interest rate.

This can be a huge benefit because you can have more freedom to manage your money and maybe saving your money for more rewarding investment.

3. Further discounts

Businesses among loan consolidating companies are very competitive and besides offering lower interest rate, a lot of them are willing to give you further discount when you make payment on time and you choose to auto-pay your payment.

It might not seem a lot but when you look at the total sum you save, it is still a considerable amount that is worth considering to. So, remember to ask about these or other possible discounts when you sign up for the student loan consolidation program.

Since now you have the idea what student loan consolidation program is all about, it is to great hope that you consider this option to manage your loan.

You can manage your finance,

Michael w.