Is A Student Loan Consolidation Or Federal Student Loan
By Dean Shainin, Thu Dec 8th
Copyright 2005 Dean Shainin
With the cost of education going through the roof, going tocollege can be very costly. Many students don't have thousandsof dollars to pay their way through college. This is why so manycollege students use student loans and federal student loans toget themselves through college. When it comes time to pay backtheir student loans, it can be a real burden and a distractionfrom their career.
Today's career minded students can get help with the burden ofhaving several student loans. One can focus on their chosencareer, instead of losing sleep over paying several monthlystudent loan payments. Student loan and federalstudent loan can be the solution with severalbenefits.
How Does Student Loan Work?
Here is typically how a student loan works. When astudent first applied for several loans from several differentagencies and student loan providers, they each gave a differentinterest rate and term for paying back the loans.
The idea of student loan consolidation, is to take all thedifferent student loans and put them into one easy convenientloan. You then only have to make one monthly loan payment everymonth, instead of several loan payments every month over time.
This saves the student both time and money. Having a lowerinterest rate and less checks to write every month are a coupleof the many bebefits of doing a student loan orfederal student loan consolidation.
What About Federal Student Loan Consolidation?
There are several advantages when you get a federal student loanconsolidation. You can take advantage of fixed interest rates,lower monthly payments, one payment each month, get paymentincentives and new or renewed deferments.
There is usually not a minimum loan balance required with thistype of loan program. Also, you have the option of which loansyou may want to include and money saving payment incentive planswith some federal student loan programs.
Another benefit is that you can consolidate your undergraduateloans if you are still in graduate school. You can decide onwhat loans you want to consolidate from the loans that qualify.
However, federal student loans can't include loansyou may have received from banks, credit unions, personal loans,consumer debt loans or any other type of financial service loansyou may have applied for in the past. They have to be federalstudent loans to qualify.
8 Helpful Benefits From Student Loan Consolidation
1. Lower Monthly Payments. Depending on your student loansituation and the type of lender you choose, you may be able tolower your monthly payments by up to 50%
2. Having Simple Loan Payments. By consolidating your studentloans, you only have one loan payment per month and one check towrite. This is very beneficial if you are writing several checksevery month to multiple lenders.
3. Having Fixed Interest Rates. With some federal consolidationloans you can have a fixed rate for the life of your studentloan.
ACS provides non profit credit counseling, credit management and consolidation services to consumers
ACS provides credit repair, credit counseling and free consolidation information to consumers. ACS helps people solve debt problems by providing free credit counseling articles and resources. ACS is a non-profit community organization whose staff members have the training and experience to assist you.
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It's best to do research to see what the best interestrates and term you are eligible for. You can check online tocalculate the interest rate on a new student loanbased on the rates of your current student loans. You can thenround up to the nearest 1/8th of a percent of the weightedaverage of the interest rates on your eligible student loans.
4. Extending Your Payment Period. You may have a lot of studentloan debt. With federal loans you may be able toextend the payment term up to 30 years. It's a good idea torealize you will end up paying more interest over the life ofyour student loan consolidation. The idea is to get someleverage until your career takes off. You can focus on makingmoney instead of several monthly loan payments.
5. In School Programs. While still in school,eligible students can lock in a low rate. This would put youinto repayment status, but since you are still in school, youare automatically put into deferment. The drawback ofconsolidating your loans while in school, is that you lose your6 month grace period. The solution to this would be to requestforbearance for up to 1 year on your student loan consolidation.Here again you can do some research and get more informationonline.
6. Lower Interest Rate. Student loan can save youthousands of dollars. You may be using credit cards with 12% to28% interest trying to keep up with your bills. This can costyou thousands of dollars when you pay the minimum monthlypayments on high interest credit card debt. Having a studentloan may be your best option if you can get lowerinterest rates when consolidating your student loans.
7. New Interest Rates. With a new student loan consolidation,you may be able to get a much better interest rate. Interestrates are now at an all time low. You may have been paying ondebt you built up from several years ago, at high interestrates. Things change over time in the financial industry.
8. Help Relieve Stress. With a student loan youdon't have to worry about several monthly loan payments and duedates. This in itself, can make a student loan consolidationworth your while. You can focus on your new career, instead ofthose nagging loan payments every month.
Student Loan Services And Resources Online To HelpYou
You can get a student loan online quickly andeasily. The Internet makes research and finding goodconsolidation loan programs. You can get done in a day, whatused to take several weeks. You can learn everything you need toknow from information sites that provide the latest news,resources, tools and data in regards to student loanconsolidation and federal student loan consolidation.
With knowledge you can be empowered to get the best type ofprogram for student loan consolidation. You can get loan quotes,rates and compare loan companies that are competing for yourbusiness.
About the author:Dean Shainin is a consultant specializing in student loanconsolidation. Get valuable resources, tools, information andmore articles on student loan consolidation, visit this site:http://www.studentloanconsolidationtips.com
