Citbank Consolidation
Company Background
Citibank is a global provider of personal and commercial financial products and services. A sector of the Citi loan business is targeted to college students, both undergraduate and graduate, along with parents of K-12 and undergrads. Student loans were added to most private lenders loan menus a few years ago and since then have grown into a very profitable part of any financial lender’s business model.
Citi’s FFELP Includes Consolidation Loan
Federal student loans, served by private lenders, fall into the Federal Family Education Loan Program (FFELP). These include the Stafford, Perkins, and PLUS Loans for parents and for grads. You’d be hard pressed to locate a college student without the need for at least one federal loan, in fact many sources report the Stafford Loans are perhaps the single most disbursed loan.
Many college students carry multiple federal loans and then add private loans on top of those, all to gain a college degree.
Citi’s Loans Indicate Unwieldy Graduate Debt
Consider the fact that Citibank features student loans for undergraduates, graduates and those for specific graduate specialties—Health Professions and Residency Loans, and Law and Bar Study Loans. New grads must begin repayment of all loans after the post-graduation grace period. Repayment for many new grads is a big wake up call to the realities of personal finance:
- If you are unable to make your monthly payments on time, or at all;
- If one or more loans are in default;
- If you have multiple federal loans, and through multiple lenders;
- If you have other pressing financial responsibilities;
- If you have high interest rates;
…you may be a candidate for a FFELP Consolidation Loan through Citibank.
Terms of the FFELP Consolidation Loan
Thanks to the feds the federal consolidation loan has pre-established terms: a fixed interest rate, since July 1, 2006, calculated on the “weighted average” of all your federal loan interest rates on the date your consolidation app is submitted, and capped at 8.25; applicants are exempt from a credit check; students in school no longer qualify for federal loan consolidation.
Private lenders add borrower benefits onto the set-in-stone federal terms. Citi incentives for federal loan consolidation include:
- Apply for the loan even if you are not a Citi customer.
- Combine all federal loans, from multiple lenders.
- Apply for automatic payments and earn a .25% interest rate deduction.
- Make 36 months worth of payments, consecutively and on-time and earn an additional 1.00% off your interest rate.
- Fee-free application and early repayment.
Private Loan Consolidation Reduces Student Loans to One Payment
Citi’s Private Student Consolidation Loan enables you to consolidate any of your Citi private student loans, private student loans from other lenders and even a previous student loan consolidation. A Citi feature allows students within two years of graduation the opportunity to consolidate. Also, for good loan repayment practices you may earn interest rate deductions: .25% for automatic electronic payment deductions and .50% for on-time, consecutive payments, 36 to be exact.
