In the United States, there are many school loan consolidation programs that can help students get out of high interest debt situations. These programs allow students to combine multiple student loans into one lower monthly payment. This usually results in a longer loan term and lower monthly payments. There are other benefits as well. Most of these programs are based on merit and need-based programs, so the terms of these loans may vary from one school to another.
There are many school loan consolidations available. For instance, you may be eligible for a federal subsidized student loan refinance if you have exhausted your unsubsidized or subsidized loans. The criteria is that you must be enrolled in an accredited school. You must also qualify for financial assistance based on income, and/or credit. Some lenders will only issue unsubsidized school loan consolidations to students who earn full-time grade levels. You can also get a federal subsidized or unsubsidized student loan refinance from a private lending institution, but you will likely have to pay higher interest rates.
One of the benefits of a school loan consolidation is that the interest rate and the monthly payments remain at the same rate. If you switch lenders, you will likely get a new interest rate and different monthly payments. In some cases, however, lenders will switch the terms of your refinancing. Talk with your financial institution about switching lenders, or about refinancing through the same financial institution. This will reduce your overall interest rate and probably your monthly payments.
Another benefit of school loan consolidation is that you can usually get better terms than you would get by refinancing your student loans alone. Lenders generally want to retain your business because they are more likely to receive payments if you are able to make them. The longer you can stretch out your payments, according to your financial ability, the better. This gives you added stability. If your payments are stretched out longer, your chances of defaulting also go down, giving you an advantage in the long run.
Before you decide to consolidate your federal student loans, talk with your lender or financial institution. Find out what type of school loan consolidation you are eligible for. If you are able to consolidate both federal and private student loans, you may be able to combine your interest rates. Or, you may have options for combining your federal and private loans. Your lender or financial institution can help you understand the consolidation programs available to you.
As you consider which school loan consolidation plan is best for your situation, keep in mind that if you consolidate federal loans, you will get a fixed interest rate. If you consolidate private loans, you will probably receive a lower interest rate because you will be borrowing from a different private lender. However, the interest rate is not set by law.
As you gather information about the student loan debt consolidation, keep in mind that there is always a fee involved. This service can be done in house, over the phone or online. There are even companies that offer a free consultation. You’ll need to complete some financial information and fill out application forms. Depending on the company and program you choose, this could take a few weeks or months to complete.
In order to save the most money, it is helpful to get multiple quotes from different companies and programs. Comparing student loan consolidation and student loan refinance quotes will help you save a lot of money on monthly payments. You can easily compare lenders on the Internet. You don’t need to leave your home. Take advantage of student loan consolidation programs today to help lower your monthly payments and make college more affordable.