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Student Loan and
Consolidation Services Center
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Federal Student
Loan Consolidation Can Save Money On Payments
One of the toughest things
many new graduates face when they earn their college degree is paying
off their student loans. Graduates who had to continually take out
loans during the course of the education can find themselves in deep
debt and payments coming due, usually six months after graduation.
There may be a glimmer of hope by reducing the monthly payments through
federal student loan consolidation to lump all of the loans together
and make a lower monthly payment.
For most students, the
amount of the monthly payment can be reduced by as much as 53 percent
and by applying before beginning paying back the loans, the low
interest rate will last for the life of the loan. Additionally, loans
accepted in the federal student loan consolidation program during the
initial grace period can trim interest rates by .6 percent and there is
only one loan payment to make every month. Depending on the agency that
provides the federal student loan consolidation, there may not be any
credit checks or fees associated with the loan approval.
A Stafford Loan federal
student loan consolidation agreement will reduce the aggregate monthly
payments by 53 percent and provide a fixed rate for the life of the
loan. PLUS loans can also be consolidated into one loan with a lower
monthly payment, but the stipulation is the loan total has to be
greater than $20,000 to be eligible.
Graduate
Students Also Have Consolidation Options
Students who consolidated
their loans from their under graduate education and are now facing
loans from their graduate education can receive federal student loan
consolidation on their Stafford loans and combine them with the
previously consolidated loans. This will allow them to make only one
payment on the combination of all of their educational loans.
When seeking federal
student loan consolidation options, it should be known that under
federal rules, interest rates must mirror those offered by the
government. However, there may be some allowable discounts from the
lenders that drop the price of the loan. For example, a lender may
offer a small discount for automatic payments from a checking account
or on a credit card to reduce the over all cost of the federal student
loan consolidation.
When looking into the loan
rates, be sure you understand what the interest rate will be. Some
lenders advertise what the federal student loan consolidation interest
will be after all discounts. Since not every applicant will qualify for
every discount, the rate received may be higher than the advertised
rate.
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