Consolidate Student Loans
When is the Best Time?
Student loans can become a terrible financial burden under a lot of circumstances. Don’t believe for one second that financial duress only happens to people with low incomes. Here are some of the main questions you may ask yourself about student consolidation loans:
- But what exactly is loan consolidation?
- What types of student loan programs feature consolidation plans?
- Where can you find a student loan consolidation lender?
- Is consolidation a choice that’s right for you?
Consolidating Services: Nuts and Bolts
Here’s how it works: When you consolidate your loans, be they federal or private, you essentially secure a new loan. You apply specifically for a consolidation loan with a lender. The term, “consolidate,” means to combine. This is a misnomer: your loans are not combined (even though this is what seems to take place behind the financial scenes), but the lender making your consolidation loan literally pays off your other loans, the loans you couldn’t afford to pay, even if they are owed to multiple lenders. In their place you have a new loan with a new interest rate, one monthly payment and a new repayment term. Your consolidation loan is a new loan you owe directly to this current lender, no one else involved. That’s one of the advantages.
Ideally, a student consolidation loan comes packaged with a markedly lower monthly payment and possibly lower interest rate. A longer repayment term is almost a guarantee—this is how banks make your lower monthly payments possible. This is how a loan consolidation essentially works.
Is consolidating the solution to your problems?
Only you can answer that question. Check out our self-assessment quiz and see if you fall into the category for those for whom a consolidation loan may be a good choice.
Where to Look to Find Deals
Of course the same rules apply for consolidation loans as apply for regular financial aid: always go for government consolidation loans first either through the Direct Loan Consolidation or the FFELP. If you need direction there are a plenty of consolidation loan services that provide free and useful advice and resources for consolidation borrowers like you.
Popular Debt Consolidation Programs
Think about it: the Stafford Loans are the single most popular student loan—widely disbursed on behalf of undergraduate and graduate students alike, in both subsidized and unsubsidized versions. Many students carry both varieties of Staffords. It stands to reason then, doesn’t it, that there would be a slew of Stafford Loan consolidations?
But even though the Stafford Loans are the most widely disbursed loans, they are only a small piece of the student loan pie. There are PLUS Loan consolidations and ways to consolidate a Perkins Loan, plus options for graduate refinancing and alumni consolidation loans, as well as types of loans suitable for undergraduate consolidation. Other relevant places to look for loan consolidation:
- What do you do if you need a loan consolidation while you’re still in school? Some borrowers still look for those in-school consolidation deals that were permissible before July 2006. There are still one or two ways some lenders manage to find a way to make an in-school consolidation loan work while you finish school.
- Consolidation of your private loans typically require you agree to a credit check. What if your credit is less than desirable? What are your best bets for a “bad credit consolidation loan”?
- With the passage of the Higher Education Access Act of 2007, lenders are a bit more cautious with their loan products especially consolidations, so the former easy deals with cash-back rebates and cheap consolidation loans has all but dried up. When competition heats up for borrower business there may be a few lenders still pushing the envelope.
School Loan Help You May Not Know About
Financial relief has arrived for some graduate students, particularly if your major field is one of those with high dollar student loans. We’ll show you how you can refinance loans from med school and law school, and access elusive chiropractic consolidation loans all in the name of your meager grad student budget.
What’s even better is that many of these seemingly little known loans are all available through many student loan lenders; perhaps the same you used for your original student loans.