Student Loan Consolidation - How does it Work?
Student loans are a great source of financial aid for students who need help paying for their education. Unfortunately, students often leave college with burdensome debt. In addition, they often have multiple loans from different lenders, meaning they are writing more than one loan repayment check each month. The solution to this problem is loan consolidation.Here is how the student loan consolidation works. You have used up thousands of dollars in student loans to pay your way through college, obtain housing throughout college, and pay for other odds-and-ends while attending college.
A student loan consolidation then takes all these different loans, pays for each of them, at which time you then pay the student loan consolidation company for the total amount of loans taken out during college. Example of Student Loan ConsolidationIf you were to have outstanding loans of $5000 to one company, $6000 to another, and $9000 to a third, the student loan consolidation allows you to owe $20000 to one company, rather than to three. This can save you money in the long run, as these companies also may be able to offer you a competitive interest rate, which means you will be paying less overall for your student loans in a shorter amount of time and to only one company. Potential Student Loan Consolidation ProblemsProblems can occur with student loan consolidations if you catch a deal that does not work out favorably to your situation.
For instance, if you choose a no-cost student loan consolidation that does not offer you a low interest rate, you could actually end up paying them more than you originally would have! It is important that you choose a company not for their "no-cost" approach, but for their willingness to get your student loans paid off with a consolidation that promotes a quick pay-off with minimal interest rates.
Am I eligible to consolidate my loans?In order to consolidate your loans, you must meet the following criteria:1.You are in your six-month grace period following graduation or you have started repaying your loans.2.You have eligible loans totaling over $7,500.3.You have more than one lender.4.you have not already consolidated your student loans, or since consolidation you have gone back to school and acquired new student loans.The following types of loans can be consolidated:
Direct Subsidized and Unsubsidized Loans
Federal Subsidized and Unsubsidized Federal Stafford Loans
Direct PLUS Loans and Federal PLUS Loans
Direct Consolidation Loans and Federal Consolidation Loans
Garanteed Student Loans
Federal insured student Loans
Federal supplement Loans for Students
Auxiliary Loans to Assist Students
Federal Perkins Loans
National Direct Student Loans
National Defense Student Loans
Health Education Assistance Loans
Health proffession student Loans
Loans for Disadvantaged Students Nursing Student Loans
A student loan consolidation then takes all these different loans, pays for each of them, at which time you then pay the student loan consolidation company for the total amount of loans taken out during college. Example of Student Loan ConsolidationIf you were to have outstanding loans of $5000 to one company, $6000 to another, and $9000 to a third, the student loan consolidation allows you to owe $20000 to one company, rather than to three. This can save you money in the long run, as these companies also may be able to offer you a competitive interest rate, which means you will be paying less overall for your student loans in a shorter amount of time and to only one company. Potential Student Loan Consolidation ProblemsProblems can occur with student loan consolidations if you catch a deal that does not work out favorably to your situation.
For instance, if you choose a no-cost student loan consolidation that does not offer you a low interest rate, you could actually end up paying them more than you originally would have! It is important that you choose a company not for their "no-cost" approach, but for their willingness to get your student loans paid off with a consolidation that promotes a quick pay-off with minimal interest rates.
Am I eligible to consolidate my loans?In order to consolidate your loans, you must meet the following criteria:1.You are in your six-month grace period following graduation or you have started repaying your loans.2.You have eligible loans totaling over $7,500.3.You have more than one lender.4.you have not already consolidated your student loans, or since consolidation you have gone back to school and acquired new student loans.The following types of loans can be consolidated:
Direct Subsidized and Unsubsidized Loans
Federal Subsidized and Unsubsidized Federal Stafford Loans
Direct PLUS Loans and Federal PLUS Loans
Direct Consolidation Loans and Federal Consolidation Loans
Garanteed Student Loans
Federal insured student Loans
Federal supplement Loans for Students
Auxiliary Loans to Assist Students
Federal Perkins Loans
National Direct Student Loans
National Defense Student Loans
Health Education Assistance Loans
Health proffession student Loans
Loans for Disadvantaged Students Nursing Student Loans
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