Private Student Loan Consolidation: Tips For Getting Approved

School fees can be overwhelming. The average cost of post-secondary schooling alone is around $100,000 and that figure does not even cover dorm room expenses, food and other extra expenses. If you are a student who has racked up school-related debt and find yourself unable to fit the money into your budget to pay it off, you should know that you do have options. There are ways to get out of debt and get back on track financially.

Private student loan consolidation is one of your best bets. With a private student loan consolidation, you are able to pay off your student loan debt and get things more organized and under control. This is like a regular debt consolidation loan, only it is used specifically for paying off school debt. Private student loans consolidation helps you get back to more important things you need to be focusing on, whether you are trying to deal with your debt while you are still in school or are finished with school and trying to gain control of your finances.

To apply for private student consolidation loans, you must first take time to compare between different lending institutions. Find at least three or four in your area and then take time to compare between them. Ask around for recommendations. Chances are you know at least a few people in school who have already gone through for a consolidation loan to pay off their school debt. They can give you a firsthand review and let you know whether or not they would advise you to go through with the same lender. There is nothing better than a personal review but if you cannot find one, you can always go online and read consumer reviews there. These give you an in depth look at the different lenders offering private student consolidation loans

Take time to learn more about private student loan consolidation before going in for your meeting. The more you know, the better off you are and you want the very best chances of getting approved for your loan. It is always more difficult the second time around and remember your credit is damaged the more often you apply for loans. If you think going through with a private student loan consolidation is the right move to make, start looking around your city or town to find a consolidator who is right for you. It is a relief to know there are options, ways to pay off the debt you have accrued and get back on track financially.

Student Loan Consolidation: The Good, Bad, and the Ugly

With tuition costs rising across the country, it has become increasingly necessary for college students to take on debt in an effort to get their degree. But student loan repayments are often difficult for students to make, especially considering that early on graduates incomes are typically quite a bit lower then their ultimate earning potential. Due to these circumstances, Student Loan Consolidation is a valuable option for many recent college grads to pursue.

How Student Loan Consolidation Works

Student Loan consolidation works like most consolidation programs. A single lender takes on the various loans you have accumulated, like Stafford, Perkins, HEAL, NSL, and private loans. While the terms and repayment conditions vary among these many different lenders, a single loan consolidation company will pay off all these loans and offer you a single, typically longer term, loan. What this means practically, is that instead of having to pay off one loan in 3 years, another in 5, and another in 10, or having one loan's interest rate be fixed and another variable, all your loans are compiled under a single system. You can then negotiate with your loan consolidation lender, about the terms of the loan. Typically, students opt for a repayment plan of 10 to 30 years. Obviously, the longer the term of the loan, the lower your monthly payment will be.

Why Consolidate?

Consolidating your student loans offers you the opportunity to stretch out your payments, so as to take advantage of your future earning power. It is quite reasonable for students to believe that they will earn more as their careers progress, and by stretching out the length of their repayments, they won't have to pay the most on their loan while their income is at its lowest point. Another benefit of student loan consolidation programs is that they take a lot of the confusion and problems out of student loan repayment. For recent graduates who have loans from a variety of public and private lenders, keeping up with the unique terms and conditions of every loan can often be a bit of a nuisance. For these reasons consolidation is a very popular option. But that does not mean that it is not without its costs.

Why Not Consolidate?

Loan consolidation of any variety, is so appealing for lenders because they can charge relatively high "consolidation" fees. While student loan consolidation is regulated better than most forms, loan consolidation companies still manage to add quite a bit to the principle of the loan (that you will ultimately have to pay back) in the form of fees. One way to avoid this is to insist that you be offered the opportunity to pay for ALL consolidation fees upfront. By doing this, you can ensure that you will at least be made aware of the quantity of charges being imposed upon you. Another problem with loan consolidation is that by extending the terms of your loans (say from 5 to 15 years) you dramatically increase the amount of interest you pay on your loans. Your interest payments on your loans accumulate over time. This means that the longer you take to pay your loan back, the more interest will accumulate. Many students fail to notice this, as they only focus on the interest rate, and not the total amount of interest that will be paid over the life of the loan.

Student loan consolidation is a valuable tool for students who want to defer their repayments until they earn more or for those who find the nuisance of maintaining many of their individual loans to be too troublesome. It is important for recent graduates to consider, however, that these benefits, despite what lenders may lead you to believe, do not come without negative tradeoffs. By being aware of both the positives and negatives of student loan consolidation, you can make more educated decisions about the whether student loan consolidation is the right solution for you.

All About Student Loan Consolidation

You might have heard a lot about student loan consolidation, but what is it really about? How can this help you ease your burden? Are there any disadvantages associated with applying for such? This article aims to shed light on these queries and help students, as well as their parents, on how to go about this whole process.

Loan consolidation means merging all your student loans into a single loan which has one repayment plan and is held by a single lender. You can have your current lender consolidate all the loans for you or have a different lender take care of this for you, depending on the terms and situation. A couple of lenders require the borrowers to have a least possible debt of $7,000 in student loans. A student that has completed their given educational program or close out education in their given program.

Another requirement for a student to participate is to have an eligible federal loan. However, it is not possible for private and federal loans to be consolidated together. A lot of limitations and standard procedures are placed upon this loan option, and these must be met for a student to make the cut. Students are advised to visit the National Student Loan Data System to look up into their credit history prior to making a decision relative to this process.

There are a lot of benefits associated with consolidating your student loans. Consolidation, for one, provides a fixed interest rate, and the borrower makes a single monthly payment to only one lender. Therefore, you will never miss out on a payment and you will only keep track of one bill. The interest rate is determined by obtaining the numerical mean of the interest rate of all the loans being consolidated and rounding up to the next one-eighth of one percent. The maximum interest rate is 8.25 percent (to take a look at your interest rate, you can visit loanconsolidation.ed.gov for an online calculator that will do all the calculation for you).

How much you save by consolidating loans is subject to what interest rate you secured and in the event that you choose to extend your repayment plan. It is said that consolidating student loans can reduce your monthly payments by up to 54 percent. On the other hand, in order to reduce your payment this much is to extend the repayment plan. You actually have a minimum of 10 years to repay student loans, however you can extend your repayment plan up to 30 years depending on the tidy sum that you are consolidating. Keep in mind that if you decide to extend your repayment term, you will be repaying the loans for a longer period of time. Not to mention, an interest perk up might occur over an extended period of time. This increased interest rate could cause your overall balance to zoom its way by thousands of dollars, depending on your status. Good thing there are no prepayment penalties, so you can always choose to pay off your debts early.

When taking care of student loans, loan consolidation or choosing a lender it's indispensable to search high and low. You need to understand how the process works, and conceive the best decision based on the situation. If you are hesitant about a specific lender, you are encouraged to contact the Department of Education.