How to Consolidate Your Student Loans
University and College students are graduating with a pile of student loan debt. Education costs are growing each year and it’s only anticipated to keep increasing. According to the Federal Reserve, college student loans (federal and private) totaled nearly $830 billion in June 2010.
Any time your monthly student loans are getting unmanageable causing you to miss installment payments or being past due with payments then you are in risk of being in default. Defaulting on a federal student loan will cause a number of problems that you don’t want. Your credit ranking will be ruined, your income maybe garnished, your loan maybe forwarded to a debt collection firm, your earnings tax return maybe seized, you could get sued by your loan provider, and you maybe refused a professional license. This however all depends on your state laws and regulations.
Before defaulting on a student loan, you will probably want to look at consolidating your loans. The primary objective to consolidating your student loan is to combine all your loans into a individual loan with a reduce interest rate with one reduced monthly payment that you pay to a single loan company. You will also have the choice to repay the loan over a extended period of time, hence lowering your monthly payment.
Loan consolidation is very similar to re-financing a mortgage loan or acquiring a home equity loan to consolidate credit card debt or pay off other high interest loans. Just about every type of federal student loan qualifies for loan consolidation. These kinds of loans consist of Perkins, FFELP, FISL, NSL, HEAL, Health Professional Student Loans, Guaranteed Student Loans and Direct loans. Loan consolidation is also readily available for private student loans. Yet, you should certainly consolidate your federal student loan first if you also have private loan. Defaulting on a federal student loan will impact you a lot more than a defaulting on a private student loan.
One more benefit with student loan consolidation is that there are no fees or expenses associated with consolidation. If you find a provider who wants to charge you fees, leave. Always go shopping around for the very best deals.
What are the advantages of federal loan consolidation?
Several of the main benefits are as follows:
1 – Doing business with a single financial institution and a single monthly payment will make your debt much easier to manage. 2 – You will have the ability to pick from several flexible payment options (standard, graduated, extended, income contingent, income-based repayment plans). 3 – You’ll be able to change repayment plans at at any time should your circumstance change. 4 – Lowered monthly payments to help ease the difficulties of repayment.
Who’s qualified for federal loan consolidation?
To qualify for federal consolidation loans, you need to have at least a single Direct Loan or Federal Family Education Loan (FFEL) that is in grace, repayment, deferment, or default status. If you are still in college you can’t be included in a Direct Consolidation Loan.
May PLUS loans, Perkins Loans, Health Professional Loans be consolidation?
If more than one of my student loans is in default, will I meet the requirements for student loan consolidation?
If you are in default, your loan may still be eligible for consolidation.
Dexter Johnson publishes about numerous financial issues for example student loan consolidation and debt consolidation loans.