Sunday, June 7, 2009

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.

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