Thursday, April 14, 2011

Student Loan Consolidation Services - Using Them To Pay Off Debt

By Stephen L Carson

When students graduate from college, they start thinking about how to pay back their loans that financed their cost of education. A number of financial lenders are offering student loan consolidation services aimed to ease the financial burden of borrowers.

As the economy attempts to recover from the crisis, authorities have set lending rates at record lows to make credit affordable and accessible to more people. As a result, student loan rates right now are also low.

This is particularly beneficial for those who have received more than one loan while they were studying in college. By consolidating their student loans, borrowers are able to reduce their monthly payments thus allowing them to allot some of their cash for other expenses.

While these loans are designed to aid students in their educational expenditures such as books, tuition, and cost of living, they actually come in two forms: federal and private.

The federal loans are those sponsored by the federal government while the others are provided by private institutions. In general, however, private student loans cannot be consolidated with federally sponsored loans.

Nevertheless, there are lenders that target borrowers who would want to refinance their private loans. Even if these kinds of services cannot use the low rates being offered when refinancing federal loans, they can still offer benefits to the borrowers.

The benefit includes making just one payment every month and, since the terms of the loan have changed, it reduces the amount the individual has to pay on a monthly basis. The catch, of course, is the resulting higher interest payment throughout the life of the loan.

A number of institutions have provided private student loan consolidation services in the market including Chase, Wells Fargo, and NextStudent. When looking for a lender to refinance the loans, a few questions need to be asked such as whether the interest rates are fixed or variable, whether there are any fees involved, and whether there are penalties in the prepayment of the loan.

Consolidating federal loans, on the other hand, can reduce the monthly payment up to half and lock-in on a low fixed interest rate.

Additionally, the borrower can bundle all the loans into one manageable loan resulting to just a single monthly payment. They will be able to obtain of the service without additional application fees, origination fees, and prepayment penalties involved.

It provides the option for borrowers to select from the various terms in repaying their consolidated loans up to 30 years. Several lenders have also provided this kind of service.

Consolidating student loans is a wise approach in obtaining more flexibility in managing personal finances particularly in this environment where many continue to be in financial turmoil.

Do you want more information about student loan consolidation services? If so, check out Click that link now!

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Monday, March 14, 2011

Student Loan Consolidation - A Way to Save Money

By Juhani Tontti

So you have a great need to use every penny as smart as possible, i.e. to get the biggest benefit from every dollar. If you have several student loans, both the private and federal ones, you can save money with a simple student loan consolidation, even hundreds a month!

1. The Student Loan Consolidation Can Be Done For Private And Federal Student Loans.

Student loan consolidation can be done for both the private and federal loans. The consolidation is a great tool for simplifying the monthly bills providing an immediate payment relief and the long term benefits. However, it is important to note, that the federal loans must be consolidated as one separate group and so must the private debts too. You cannot mixed them.

As to the federal loans, which you can consolidate only once, the interest rate will be fixed during the rest life of the loan. When you can do the consolidation during the grace period, it is the deal with the fortune, which interest rate you will get. You do not have to go through the credit check and there is no application fees

2. The Debt Refinancing.

If in your case you have just graduated and got the work, your credit score may have improved compared your student times. Now when you will do the consolidation, you will refinance the interest rate and the repayment time. This process is the most effective thinking the cost savings.

3. Consolidate During The Grace Period, You Can Reduce The Interest Rate By 0,6 %

When you consolidate during the grace period, within 6 months after the graduation, you can save in the interest rates by 0.6 %. During the times, when the interest rates are historically on a low level, just by renegotiating the interest rate can bring the much needed help.

4. How Much Are The Savings?

The ideal situation would be the one, when the interest rates are historically low. Then by consolidating and refinancing the whole debt package, you can get the maximum saving. To take examples, if your student loan is $ 10.000 and you extend the repayment time from 15 years to 25 years, you can save over $ 230 a year. With the $ 100.000 debt the saving is over $ 2.400 a year without the interest rate changes.

5. Start To Calculate The Benefits From The Present Loans Consolidation.

When you think the student loan consolidation rates, you have to take into account two things: your present loan terms consolidation rate and the future rates after your student loan possible refinancing. It can happen, that only the new interest rate brings the saving you need and there is no need to extend the repayment time.

However, remember that you can consolidate the debts only once. This means, that it may be wise to plan your monthly payments so, that your monthly expenses will be on the lowest possible level. This is a careful plan and will help you, if you will meet sudden changes with the incomes or living costs.

Juhani Tontti, B.Sc., Marketing. You can do the school loan consolidation only once during the 6 months grace period. The student loans will be changed as one loan. Visit: student loan consolidation

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