Guide For Student Loan Consolidation

Student loan consolidation, also known as student loan refinancing program, can be termed as an effective debt clearance strategy. Apart from clearing the debt, a student can also save a good amount of money through student consolidation loan since this loan is offered at lower interest rates and requires the student to pay lower monthly repayments. However, one needs to consider certain facts while opting for a student consolidated loan.

Financial Counseling:

Consolidation loan is not the only solution for student debt management. There are other viable options that can be used as an alternative. Information about these options is available with the financial-aid office. Hence, it is important for students to consult a financial counselor before considering a student consolidation loan.

Refinancing during grace period:

Federal loans such as Stafford loans provide students with a six-month grace period. This grace can be availed even after the student has graduated from the school. Loan repayment starts only after the grace period has ended. This is the right time to consolidate a student loan as the interest rates during the grace period are far less than the rates after the expiry of the grace period. Once the student is employed, interest rates are determined based on the income.

Lender Initiatives:

So as to sustain in the market and be competitive, several financial organizations and private lending firms offer a variety of packages and promotional offers so as to attract customers. Some of these include reduced interest rates, flexible repayment options, reduction on on-time payments and auto debit option. Since, there are several lending firms providing consolidated student loans, it is better to shop around so as to get the best deal.

Another useful strategy is to opt for a variable interest loan during the initial years. Once the interest rate decreases to a considerable level, the variable interest rate loan can be switched to a fixed interest rate loan. Federal and private student loans should never be combined while opting for a consolidated loan. Under certain exceptional situations, students with Perkins loans are not required to pay back their loan amount if they work for a prescribed number of hours in professions such as teaching or community service.

What Is Bad Credit Student Loan Consolidation?

With the rising costs of education, taking student loans is the only way out for most students who are keen on completing their education. Students take loans at various stages of their education with varying rates of interest applicable to them. As their education continues, these loans pile up, and managing them becomes increasingly difficult for them because of the lack of stable means of income. To help such students - bad credit student loan consolidation comes into play.

Defaulting on loans means that the credit rating of the student would slide down, making it difficult for him/her to get loans in future. The best way to deal with such a situation is to consolidate your loans into one single bundle. Bad credit consolidation makes the loan easier to handle, and the student gets the advantage of having good credit ratings and having a considerably lower rate of interest to pay.

It works by the student surrendering all his loans to a student loan consolidation company. The company repays the loans taken by the student and issues a new one for which the student is obliged to pay monthly installments.

Bad credit is the term used when a student is unable to repay his loans. It comes with a lot of disadvantages and therefore, for getting out of student loan consolidation is the best option available to the student. A student loan would help the student to have a good credit rating, making his funds much more manageable and giving him/her time to repay his/her loan.

Bad credit loan consolidation may be a bit more costly because of the student's tarnished reputation concerning the repayment of loans. However, it is still a good option to go for them since they help in taking the load off the shoulders of the student.

Direct Loan Consolidation

Many people have multiple loans running simultaneously. At some point, it may become difficult to make all the payments on time and manage the loans. Direct loan consolidation is a way to manage these loan amounts in a more organized manner. The borrower can merge all loans and pay one fixed rate of interest on the total amount.

The interest rate on a consolidation loan is based on the average of the interest rates on the loans being consolidated. This is then rounded to the next highest one-eighth of one percent. The rate must not exceed 8.25 percent, and it is a fixed rate that remains the same throughout the life of the loan.

If a person is close to the repayment of the loan, it might not be profitable to consolidate. Consolidation is beneficial depending on the original terms of an existing loan compared to the new terms offered. The factors to consider are monthly payment amounts and variable or fixed interest rates. It is advisable to consult a loan consultant.

Generally, websites also provide online calculators to compare consolidation rates with existing rates. It is also a good idea to check with the existing lender to see if they can offer any better rates before opting for consolidation.

The borrower must also check out the eligibility options. The major benefits that a borrower can gain by opting for consolidation are lower interest rates, flexible repayment options and reduced monthly payments. A borrower can also retain any subsidy that was offered on the old loans.

Consolidating Your Student Loans

Debt from student loans can be crushing to recent college graduates and get in the way of achieving other life goals. Fortunately, there is a way to reduce the strain on your finances and even improve your credit score. Many graduates are turning to loan consolidating to help manage their loan repayments. The procedure and requirements differ from federal and private loans.

Consolidating Federal Loans

Stafford loans and Federal Perkins loans are examples of federal loans. These loans are given to you by the government and may or may have accrued interest while you were attending school. Consolidating your federal student loans provides a fixed-rate refinancing program that takes all of your existing federal loans and combines them into one new loan. Your monthly student loan repayment could be cut by as much as 50% as well as reduce your interest rate by .6% if you consolidate during your grace period. One monthly payment will help you simplify your finances.

Payment relief

By creating one consolidated loan you can receive payment relief, a lengthening of your repayment term from the standard 10 years to up to 30 years. This frees up your disposable income to spend on other expenses like car payments, housing, and work-related necessities. There are no penalties for overpayment, so when the funds become available you can make larger payments and minimize your repayment term.

Consolidating Private loans

Like federal loans, consolidating private loans means lumping everything into one new loan. To consolidate your private loans from undergraduate school you will have to apply with a qualified co-signer in order to be approved. If you have a graduate degree you do not have to apply with a co-signer.

Some of the benefits include reduced interest rates, rate reductions, deferment, and no prepayment penalties. Loan holders may lower your interest rates if your credit has improved. Applying with a co-signer who has good credit could help you get a lower APR loan. There is a grace period for medical/dental residents as well as military personnel if their private student loans are consolidated. As with federal student loan consolidation, you can also have your repayment period extended allowing you to pay the lowest monthly payment possible.

How Much Student Loan Can You Get?

As there are different types of loans offered for studying abroad, for undergraduate students and for graduate students and for studying in US. So, there procedures are different and different principal sum of loan amount can be offered according to the need of a student's educational expenses.

International Undergraduate Student Loans:

This loan is available for non-US citizens who are enrolled at least as a part-time student at a TERI approved school. So, applying with a US co-signer is necessary to get approval for loan, no exceptions are accommodated.

Students need to give information about their Full names, Social Security Number, Date of Birth, Permanent Address, Monthly Rent, Home Phone Number, Occupation, Employer details, Business Phone number, Gross Annual Income, Proof of enrollment, and References.

The international student loan is not need-based so students don't need to worry about it. If the student has bad credit history, he should first review the credit repair options. A qualified co-signer is a must. The time of getting a loan depends on different factors i.e. credit history, school, and amount of loan the student requested for. The maximum of 3% interest rates will be charged for this kind of loans.

Undergraduate Students can borrow up to the lesser of the cost of attendance or $30,000. The total a student can borrow for undergraduate studies is $130,000 overall.

International Graduate Student Loans:

These types of loans are available for US citizens and permanent residents enrolled in TERI approved schools, colleges, and universities in USA who wish to pursue study abroad programs through those schools.

Information required is same as for the Undergraduate Student Loans. This is also not a need-based student loan program. If student has bad credit history, he can go for credit repair options first. Qualified co-signer is required as well. Up to $40,000 can be given for a year of student's education in special cases and total up to $130,000 will be given for graduate studies abroad.

Alternative Student Loans:

These loans are for US citizens and permanent residents attending schools, colleges, or universities within the USA or international students with a US citizen co-signer. A co-signer is strongly required for both US citizens and non-US citizens. And both the student and co-signer must have good credit history.

Information required applying for these loans are similar to those for International Loans. These types of loans are also not need-based. Credit review options must be viewed before applying for loans with bad credit history. Maximum 3% interest rates will be charged on these kinds of loans.

Per academic year, a student can be assigned up to $30,000 with a maximum of $130,000 overall for graduate or undergraduate studies.

Bad Credit Bill Consolidation Loans

Bad credit bill consolidation loans can offer fast debt relief. Bad credit bill consolidation loans are easy to qualify for and can reduce debt and expenses, freeing up your hard earned money for more than just interest payments and penalties. Your bad credit rating does not hinder you from qualifying these loans that can change your life.

Bill Consolidation Works

Bill consolidating works by paying off your high interest debt using a single loan that with better terms and a longer repayment program. By extending the length of you can wipe out any short term high risk debt that is keeping your bills at break neck rates.

Consolidating your bills also helps you to improve your credit score. Your credit is negatively impacted by having too many open credit lines, and consolidation of your bills will put you on track to improving your bad credit as you more easily maintain on time payments and pay down your debt.

With discipline and hard work bill consolidation will help you reduce your debt, improve your bad credit and get your finances back on track. A sound commonly used approach is to use a bill consolidation loan to lower your monthly payments and apply your additional funds to paying down your loan even faster than you would have otherwise.

Any short term bad debt that you carry, can benefit from being paid off with debt consolidation. Commonly credit cards, payday loan debt, or high interest personal loans can all have their payments dramatically reduced when you move over to a longer term consolidation offer.

Get a Free Customized Debt Solution Today

If you are over burdened, drowning in your current bill burden, simply check out what these consolidation lenders have to offer. They offer free no obligation offers on how bad credit bill consolidation loans can help reduce your costs and save you money on your monthly bills. With a few details regarding how you carry your current debt, these lenders will customize an offer just for you, you will probably be surprised at how much you can save.

Student Loan Consolidation Advice

Student loan consolidation is an effective and convenient debt management strategy highly beneficial for students who have defaulted with the student loan repayments and are willing to get their credit history back on track. However, student loan consolidation is always the last option to be considered when a student is trying for debt clearance.

Listed below are certain facts that one has to take into consideration before opting for student loan consolidated.

Consultation with the financial-aid office: Various student loan programs have interesting options for debt clearance. For example, in case of Perkins Loans, one can reduce the loan amount by doing some community service for certain number of hours. Also, physically challenged students have separate concessions. All this information is available with the financial-aid officer in your school. One needs to have a financial counseling with the officer before opting for consolidation.

Taking advantage of the grace period: Federal loan programs such as Stafford Loans offer a 6-month grace period to students who have just graduated from the school. Within this period, the student is expected to get employed and become financially independent so as to start the loan repayment process. According to market experts, this is the right time to apply for a student loan consolidation. Interest rates are really low during this period. Once the grace period ends, interest rates are determined based on the income of the student.

Never combine federal student loans with private loans: One should never combine private loans like credit card debt and car loans with federal student loans while opting for loan consolidation. Private loans come at a higher interest rate and do not carry the same type of benefits like a federal loan. Hence, consolidating a private loan with a federal loan would increase the overall interest on the loan.

Lender initiatives: With the objective of wooing customers and also to withstand competition in the market, lenders offer attractive loan packages. It is important to take advantage of these lender initiatives. Information about these initiatives can be obtained by shopping around and getting quotes from multiple lenders.