Wednesday, July 1, 2009
Friday, June 12, 2009
Student Federal Loan Consolidation – 10 Facts you Must Know
With this student federal loan consolidation FAQ section, you can get some answers to your questions that might often come to your mind while choosing the option of student debt consolidation.
1. What is student federal loan consolidation?
It is a program under which, your multiple loans are converted to one single loan, which benefits you in paying to one lender instead of multiple lenders.
2. Why should we choose student federal loan consolidation?
Choosing loan consolidation cut down the interest amount, which was originally much higher than it is after consolidating the loan. With this, it also reduces the hassles of making many monthly payments.
3. How do I consolidate the loan?
Applying for federal loan consolidation is a very simple procedure. You can apply online, or download the application form, fill in and send it to us.
4. Is there any kind of credit check done?
This is a remarkable feature of debt consolidation that it does not require any credit history check. Therefore, no matter how bad or good your credit background had been in the past, you can still qualify for this loan.
5. Are there any disadvantages of student federal loan consolidation?
Although, there are many advantages of loan consolidation, but there is a disadvantage also, which states that your total interest cost is increased. Yes, making small monthly payments over a long time can increase the overall cost.
6. Are there any provisions for cancellation of student federal loan consolidation?
The loan consolidation application once processed cannot be cancelled, only if the application process is not completed then there are some chances of its cancellation.
7. Am I eligible for loan consolidation?
For availing the loan consolidation, you must be a student borrower and your loans should be in grace, repayment, and deferment. In addition, if you are a parent borrower i.e. parents who want loans for the education of their child, you can also get the loan.
8. Can my spouse and I consolidate loans?
Spouse consolidation loans existed before, but are now no longer available.
9. What loans are eligible for student federal loan consolidation?
Loans which possess one or more of the federal subsidized and unsubsidized loan, direct, subsidized and unsubsidized loan, Federal Perkins loans, Federal Nursing Student loans, Health education assistance loans etc.
10. Are there any loans, which cannot be consolidated?
Yes-private loans from banks, institutions, parents or any other such individuals cannot avail loan consolidation process.
Is there any option of reconsolidation of loan?
Yes, loans either new or old can be included for consolidation, if done within 180 days after the student loan consolidation is issued.
If your life can be made easier by opting student federal loan consolidation program, then why not decide over it today!
1. What is student federal loan consolidation?
It is a program under which, your multiple loans are converted to one single loan, which benefits you in paying to one lender instead of multiple lenders.
2. Why should we choose student federal loan consolidation?
Choosing loan consolidation cut down the interest amount, which was originally much higher than it is after consolidating the loan. With this, it also reduces the hassles of making many monthly payments.
3. How do I consolidate the loan?
Applying for federal loan consolidation is a very simple procedure. You can apply online, or download the application form, fill in and send it to us.
4. Is there any kind of credit check done?
This is a remarkable feature of debt consolidation that it does not require any credit history check. Therefore, no matter how bad or good your credit background had been in the past, you can still qualify for this loan.
5. Are there any disadvantages of student federal loan consolidation?
Although, there are many advantages of loan consolidation, but there is a disadvantage also, which states that your total interest cost is increased. Yes, making small monthly payments over a long time can increase the overall cost.
6. Are there any provisions for cancellation of student federal loan consolidation?
The loan consolidation application once processed cannot be cancelled, only if the application process is not completed then there are some chances of its cancellation.
7. Am I eligible for loan consolidation?
For availing the loan consolidation, you must be a student borrower and your loans should be in grace, repayment, and deferment. In addition, if you are a parent borrower i.e. parents who want loans for the education of their child, you can also get the loan.
8. Can my spouse and I consolidate loans?
Spouse consolidation loans existed before, but are now no longer available.
9. What loans are eligible for student federal loan consolidation?
Loans which possess one or more of the federal subsidized and unsubsidized loan, direct, subsidized and unsubsidized loan, Federal Perkins loans, Federal Nursing Student loans, Health education assistance loans etc.
10. Are there any loans, which cannot be consolidated?
Yes-private loans from banks, institutions, parents or any other such individuals cannot avail loan consolidation process.
Is there any option of reconsolidation of loan?
Yes, loans either new or old can be included for consolidation, if done within 180 days after the student loan consolidation is issued.
If your life can be made easier by opting student federal loan consolidation program, then why not decide over it today!
Federal Loan Consolidation – your Friend in Need
Federal loan consolidation is all about providing loans to students in need of finance. These student debt consolidation loans come as a fresh lease of life to students who are already reeling under the impact of student loans taken earlier. These loans have a longer repayment date and are provided at a much lower rate of interest. You can take advantage of these loans in many ways. Students with bad credit or no credit can apply for federal loan consolidation. Your application does not go through a credit card check. You do not have to give any guarantee of income. Best of all, you do not have to pay any fees.
The Benefits Of Federal Loan Consolidation
The greatest advantage of federal loan consolidation is that it has the guarantee of the government. Private student loan consolidation companies try to entice borrowers by offering loans at a reduced rate of interest. Usually, the students get a package, in which they get a reduction in interest rates, a longer duration of payment and a lower monthly installment. During the term of the loan even if you miss an installment due to a financial crunch, you do not have to lose sleep over it as you can always apply for extension. You can also offer a date on which it will be possible for you to pay. Because of the ensuing benefits, federal loans are extremely helpful for student debt consolidation.
When you opt for federal loan consolidation, you should tread very carefully and choose your lender very carefully. You get only one chance to take a federal loan. Make sure that the lender is at a reachable distance and one with whom you can interact freely. Also, see that the lender gives you proper respect and consideration. A federal program helps you to save thousands of dollars in terms of interest. Besides, you have a longer tenure and lower fixed installment to pay. However, this program may be available for only a short term, so do not lose time and apply for a federal loan consolidation immediately.
Some More Benefits
Moreover, this is not all; students who pay on time get rewards and incentives from the government. You also improve your credit-rating if you a pay on time. With a federal loan consolidation program, you can save up to 60%on your monthly payment besides getting tenure as long as 30 years if the amount of loan is bigger than $10000. For all purposes, student loan consolidation companies are more than eager to provide loans under a federal loan consolidation program. This is a new loan for the student and he no longer needs to worry about the previous loan installments.
Federal loans are available for a big section of student loans and other loans. HPSL, NSL, FISL, ALAS, SLS, NDSL, HEAL, PLUS and LDS. The US government supports federal loans consolidation under certain conditions. You should try to repay your loan according to the terms and conditions; otherwise, the government pays the lending companies, and extracts the same from the borrower, which can be very inconvenient for the borrower.
The Benefits Of Federal Loan Consolidation
The greatest advantage of federal loan consolidation is that it has the guarantee of the government. Private student loan consolidation companies try to entice borrowers by offering loans at a reduced rate of interest. Usually, the students get a package, in which they get a reduction in interest rates, a longer duration of payment and a lower monthly installment. During the term of the loan even if you miss an installment due to a financial crunch, you do not have to lose sleep over it as you can always apply for extension. You can also offer a date on which it will be possible for you to pay. Because of the ensuing benefits, federal loans are extremely helpful for student debt consolidation.
When you opt for federal loan consolidation, you should tread very carefully and choose your lender very carefully. You get only one chance to take a federal loan. Make sure that the lender is at a reachable distance and one with whom you can interact freely. Also, see that the lender gives you proper respect and consideration. A federal program helps you to save thousands of dollars in terms of interest. Besides, you have a longer tenure and lower fixed installment to pay. However, this program may be available for only a short term, so do not lose time and apply for a federal loan consolidation immediately.
Some More Benefits
Moreover, this is not all; students who pay on time get rewards and incentives from the government. You also improve your credit-rating if you a pay on time. With a federal loan consolidation program, you can save up to 60%on your monthly payment besides getting tenure as long as 30 years if the amount of loan is bigger than $10000. For all purposes, student loan consolidation companies are more than eager to provide loans under a federal loan consolidation program. This is a new loan for the student and he no longer needs to worry about the previous loan installments.
Federal loans are available for a big section of student loans and other loans. HPSL, NSL, FISL, ALAS, SLS, NDSL, HEAL, PLUS and LDS. The US government supports federal loans consolidation under certain conditions. You should try to repay your loan according to the terms and conditions; otherwise, the government pays the lending companies, and extracts the same from the borrower, which can be very inconvenient for the borrower.
Coming Clean With Student Federal Loan Consolidation
Student federal loan consolidation is one of the best ways to clear up messy student debts that come from multiple lenders and involve non-fixed interest rates. Pursuing a degree can be an expensive affair and by the time they graduate, many students find themselves saddled with heavy student debts. While the majority will be able to find employment soon enough, starting out on a new career with a trail of debt following you can be a frustrating affair.
Student loan consolidation gives you an easy and affordable option to deal with student loans. This allows you to combine all outstanding debts into one thus making it easier to deal with. While there are a number of debt consolidation programs available, the federal loan consolidation programs are best suited for students.
Efficiency And Options
Student federal loan consolidation comes with so many benefits that it is hard to find a reason not to opt for them. They have been specifically designed to help students deal with the burden of student debt so that they can concentrate on studying and finding a good job on graduating. A student federal loan consolidation is ideal for those whose debts run above $7000.
Student federal loan consolidation allows students to bring together all their federal loans into one loan. Practically speaking, this is treated as an entirely new loan which is easier to maintain since you are not dealing with multiple lenders and making multiple payments. This kind of debt consolidation allows you to lock your interest rate at a reduced level and offers flexible payment plans as well.
Flexible And Secure
Since the government offers federal loan consolidation, private lenders are also benefited. The government will cover the costs in case the borrower cannot pay. Student federal loan consolidation can reduce the burden of monthly payments by as much as 60% in some cases. Apart from offering flexible payment plans, the term period can also be extended depending on the total amount. Since there is no need for co-signers or credit checking, students who are under financial stress can also avail these consolidation packages.
There are a number of different student federal loan consolidation schemes that are available and students can choose the one that best suits their needs. These include Loans for Disadvantaged Students, Auxiliary Loans to Assist Students and Federal Parent Loans for Undergraduate Students. By availing student federal loan consolidation programs, students can drastically reduce their debt burden and help put their finances in order. By doing so, they can focus their energies on studying and laying the foundations for their future careers
Student loan consolidation gives you an easy and affordable option to deal with student loans. This allows you to combine all outstanding debts into one thus making it easier to deal with. While there are a number of debt consolidation programs available, the federal loan consolidation programs are best suited for students.
Efficiency And Options
Student federal loan consolidation comes with so many benefits that it is hard to find a reason not to opt for them. They have been specifically designed to help students deal with the burden of student debt so that they can concentrate on studying and finding a good job on graduating. A student federal loan consolidation is ideal for those whose debts run above $7000.
Student federal loan consolidation allows students to bring together all their federal loans into one loan. Practically speaking, this is treated as an entirely new loan which is easier to maintain since you are not dealing with multiple lenders and making multiple payments. This kind of debt consolidation allows you to lock your interest rate at a reduced level and offers flexible payment plans as well.
Flexible And Secure
Since the government offers federal loan consolidation, private lenders are also benefited. The government will cover the costs in case the borrower cannot pay. Student federal loan consolidation can reduce the burden of monthly payments by as much as 60% in some cases. Apart from offering flexible payment plans, the term period can also be extended depending on the total amount. Since there is no need for co-signers or credit checking, students who are under financial stress can also avail these consolidation packages.
There are a number of different student federal loan consolidation schemes that are available and students can choose the one that best suits their needs. These include Loans for Disadvantaged Students, Auxiliary Loans to Assist Students and Federal Parent Loans for Undergraduate Students. By availing student federal loan consolidation programs, students can drastically reduce their debt burden and help put their finances in order. By doing so, they can focus their energies on studying and laying the foundations for their future careers
Loans Eligible For Federal Loan Consolidation
There are many kinds of federal loans that are eligible for federal loan consolidation. The only kinds of loans that are not eligible are privately-funded loans. Other than this, a person with a more or less stable financial disposition can be easily consolidated within one or two months of application.
Backtrack - America's in Debt
According to the FTC:
"Having trouble paying your bills? Getting dunning notices from creditors? Are your accounts being turned over to debt collectors? Are you worried about losing your home or your car?"
"You're not alone. Many people face a financial crisis some time in their lives. Whether the crisis is caused by personal or family illness, the loss of a job, or overspending, it can seem overwhelming. But often, it can be overcome. Your financial situation doesn't have to go from bad to worse."
As the FTC stated, having debt doesn't have to be the end of the world. Consolidation, including federal loan consolidation gives a person a chance for financial security- if the repayment is done well.
Eligible Agricultural Loans
These loans are eligible for federal loan consolidation:
1. Farm loans - operating loans are bestowed by FSA or the Farm Service Agency. These loans are bestowed to farmers that are unable to acquire necessary credit to continue their livelihood.
2. Commodity marketing loans - when commodity crops are having a hard time, this loan can be used to bolster production and sales.
3. Ownership loans - ownership loans are bestowed to farmers that cannot acquire credit from the Farm Credit System and similar entities due to unforeseen disasters and economic difficulties.
4. Farm storage loans - as the name implies, these loans can be used for the construction of grain storage facilities.
Eligible Business Loans
The following are also eligible for federal loan consolidation:
1. Small business loans - can be traced back to sec. 7 of the SBA or Small Business Act.
2. Disaster loans - if a small business or an entrepreneurial outfit has experienced economic harm in an area that has been declared an area of disaster, this loan is bestowed. The assistance comes from the Small Business Administration.
3. Indian loans - American Indians can apply for this loan if they are having a difficult time acquiring any form of commercial credit. This allows members of the American Indian community to engage in small businesses without being redlined by private lenders.
4. Microloans - start-ups and other very small businesses can be started with microloans.
5. Physical disaster loans - similar to disaster loans, these loans are given to businesspeople who have had experienced structural damage in disaster areas.
Managing Debt
According to Ernst Derek, a CPA and credit counselor from Minnesota:
"The development of a good budget plan is always the first step to debt management. It has nothing to do with how smart a person is or otherwise. It's about knowing exactly how much you can afford on a monthly basis. Consumers should never be afraid to face the real state of their financial affairs."
Backtrack - America's in Debt
According to the FTC:
"Having trouble paying your bills? Getting dunning notices from creditors? Are your accounts being turned over to debt collectors? Are you worried about losing your home or your car?"
"You're not alone. Many people face a financial crisis some time in their lives. Whether the crisis is caused by personal or family illness, the loss of a job, or overspending, it can seem overwhelming. But often, it can be overcome. Your financial situation doesn't have to go from bad to worse."
As the FTC stated, having debt doesn't have to be the end of the world. Consolidation, including federal loan consolidation gives a person a chance for financial security- if the repayment is done well.
Eligible Agricultural Loans
These loans are eligible for federal loan consolidation:
1. Farm loans - operating loans are bestowed by FSA or the Farm Service Agency. These loans are bestowed to farmers that are unable to acquire necessary credit to continue their livelihood.
2. Commodity marketing loans - when commodity crops are having a hard time, this loan can be used to bolster production and sales.
3. Ownership loans - ownership loans are bestowed to farmers that cannot acquire credit from the Farm Credit System and similar entities due to unforeseen disasters and economic difficulties.
4. Farm storage loans - as the name implies, these loans can be used for the construction of grain storage facilities.
Eligible Business Loans
The following are also eligible for federal loan consolidation:
1. Small business loans - can be traced back to sec. 7 of the SBA or Small Business Act.
2. Disaster loans - if a small business or an entrepreneurial outfit has experienced economic harm in an area that has been declared an area of disaster, this loan is bestowed. The assistance comes from the Small Business Administration.
3. Indian loans - American Indians can apply for this loan if they are having a difficult time acquiring any form of commercial credit. This allows members of the American Indian community to engage in small businesses without being redlined by private lenders.
4. Microloans - start-ups and other very small businesses can be started with microloans.
5. Physical disaster loans - similar to disaster loans, these loans are given to businesspeople who have had experienced structural damage in disaster areas.
Managing Debt
According to Ernst Derek, a CPA and credit counselor from Minnesota:
"The development of a good budget plan is always the first step to debt management. It has nothing to do with how smart a person is or otherwise. It's about knowing exactly how much you can afford on a monthly basis. Consumers should never be afraid to face the real state of their financial affairs."
Loans Eligible For Federal Loan Consolidation
There are many kinds of federal loans that are eligible for federal loan consolidation. The only kinds of loans that are not eligible are privately-funded loans. Other than this, a person with a more or less stable financial disposition can be easily consolidated within one or two months of application.
Backtrack - America's in Debt
According to the FTC:
"Having trouble paying your bills? Getting dunning notices from creditors? Are your accounts being turned over to debt collectors? Are you worried about losing your home or your car?"
"You're not alone. Many people face a financial crisis some time in their lives. Whether the crisis is caused by personal or family illness, the loss of a job, or overspending, it can seem overwhelming. But often, it can be overcome. Your financial situation doesn't have to go from bad to worse."
As the FTC stated, having debt doesn't have to be the end of the world. Consolidation, including federal loan consolidation gives a person a chance for financial security- if the repayment is done well.
Eligible Agricultural Loans
These loans are eligible for federal loan consolidation:
1. Farm loans - operating loans are bestowed by FSA or the Farm Service Agency. These loans are bestowed to farmers that are unable to acquire necessary credit to continue their livelihood.
2. Commodity marketing loans - when commodity crops are having a hard time, this loan can be used to bolster production and sales.
3. Ownership loans - ownership loans are bestowed to farmers that cannot acquire credit from the Farm Credit System and similar entities due to unforeseen disasters and economic difficulties.
4. Farm storage loans - as the name implies, these loans can be used for the construction of grain storage facilities.
Eligible Business Loans
The following are also eligible for federal loan consolidation:
1. Small business loans - can be traced back to sec. 7 of the SBA or Small Business Act.
2. Disaster loans - if a small business or an entrepreneurial outfit has experienced economic harm in an area that has been declared an area of disaster, this loan is bestowed. The assistance comes from the Small Business Administration.
3. Indian loans - American Indians can apply for this loan if they are having a difficult time acquiring any form of commercial credit. This allows members of the American Indian community to engage in small businesses without being redlined by private lenders.
4. Microloans - start-ups and other very small businesses can be started with microloans.
5. Physical disaster loans - similar to disaster loans, these loans are given to businesspeople who have had experienced structural damage in disaster areas.
Managing Debt
According to Ernst Derek, a CPA and credit counselor from Minnesota:
"The development of a good budget plan is always the first step to debt management. It has nothing to do with how smart a person is or otherwise. It's about knowing exactly how much you can afford on a monthly basis. Consumers should never be afraid to face the real state of their financial affairs."
Derek continues with:
"Creditors and loan holders should also be your allies. They're not really enemies. They just want you to repay the debt, it's that simple."
Backtrack - America's in Debt
According to the FTC:
"Having trouble paying your bills? Getting dunning notices from creditors? Are your accounts being turned over to debt collectors? Are you worried about losing your home or your car?"
"You're not alone. Many people face a financial crisis some time in their lives. Whether the crisis is caused by personal or family illness, the loss of a job, or overspending, it can seem overwhelming. But often, it can be overcome. Your financial situation doesn't have to go from bad to worse."
As the FTC stated, having debt doesn't have to be the end of the world. Consolidation, including federal loan consolidation gives a person a chance for financial security- if the repayment is done well.
Eligible Agricultural Loans
These loans are eligible for federal loan consolidation:
1. Farm loans - operating loans are bestowed by FSA or the Farm Service Agency. These loans are bestowed to farmers that are unable to acquire necessary credit to continue their livelihood.
2. Commodity marketing loans - when commodity crops are having a hard time, this loan can be used to bolster production and sales.
3. Ownership loans - ownership loans are bestowed to farmers that cannot acquire credit from the Farm Credit System and similar entities due to unforeseen disasters and economic difficulties.
4. Farm storage loans - as the name implies, these loans can be used for the construction of grain storage facilities.
Eligible Business Loans
The following are also eligible for federal loan consolidation:
1. Small business loans - can be traced back to sec. 7 of the SBA or Small Business Act.
2. Disaster loans - if a small business or an entrepreneurial outfit has experienced economic harm in an area that has been declared an area of disaster, this loan is bestowed. The assistance comes from the Small Business Administration.
3. Indian loans - American Indians can apply for this loan if they are having a difficult time acquiring any form of commercial credit. This allows members of the American Indian community to engage in small businesses without being redlined by private lenders.
4. Microloans - start-ups and other very small businesses can be started with microloans.
5. Physical disaster loans - similar to disaster loans, these loans are given to businesspeople who have had experienced structural damage in disaster areas.
Managing Debt
According to Ernst Derek, a CPA and credit counselor from Minnesota:
"The development of a good budget plan is always the first step to debt management. It has nothing to do with how smart a person is or otherwise. It's about knowing exactly how much you can afford on a monthly basis. Consumers should never be afraid to face the real state of their financial affairs."
Derek continues with:
"Creditors and loan holders should also be your allies. They're not really enemies. They just want you to repay the debt, it's that simple."
Lower Your Student Loan With Federal Loan Consolidation
Loans. Adults cannot live with them, yet most people are unable to live without borrowing money. Buying a new car requires a loan, except for the rare individual who can pay in cash, like Bill Gates; a homeowner will have to acquire a mortgage for the next 20-30 years; and, a post-secondary education often means taking out a loan, to pay for books, tuition and living expenses.
In some cases federal loans are available through the Veteran's Administration for housing. Federal loans can help for disaster relief, or agricultural needs for farmers and ranchers. However, when discussing federal loan consolidation, most people immediately consider the unsubsidized and subsidized money used to finance a college education.
A college education is a costly venture, yet definitely worth the investment of time and money. However, the tuition and fees often discourage some potential students from trading in the spatula of a fast food restaurant, and picking up a textbook. A post-secondary degree program seems like an impossible dream, rather than an obtainable goal.
Nevertheless, after careful consideration, and a brief visit with a financial aid officer, unsubsidized and subsidized student loans are available for a two-year degree, a Bachelor's, a Masters, or a Doctorate. Federal loans consolidation takes place AFTER an individual is done receiving a formal education. The loans are usually made available every year.
Because the cost of learning is beyond the average pocketbook, many students take advantage of both a subsidized and unsubsidized loan, with the plan to take advantage of federal loan consolidation after school. Once accepted for the federal loan program, students are offered the opportunity to accept, or reject, a student loan at the beginning of the school year. In many cases, both types of loans are presented, to give an individual the extra money needed to pay off expenses, and maybe have a little left to live on, without having to hold down a full-time job.
If only one loan is needed, opt to accept the subsidized version. Not only will the payment schedule not be instituted until six months after leaving school, but also the interest will not start accruing either. Although interest may seem like small potatoes, in the long-term, subsidized loans can save thousands in repayment dollars.
When more financial assistance is necessary, an unsubsidized student loan is also available, and the financial aid will later qualify for federal loan consolidation. However, for this particular avenue of financial assistance, the interest starts building immediately, even though repayment is still not required until after graduation.
So, imagine both loans were necessary to complete a degree program. Before the six-month grace period has expired, federal loan consolidation can be implemented, saving up to 54% in monthly payment amounts. How? Prior to consolidation, the length of the loan is ten years. If the loans are consolidated, the length of the loan can be extended by five-ten years, making the payments more affordable.
In addition, federal loan consolidation also reduces the ultimate interest rate. Thus, the two monthly payments combined will probably be less than repayment of one loan individually. For example, the unsubsidized loan payment may be around $200/per month. In addition, the subsidized loan is going to be another $200. Two separate bills, one big chuck of the monthly income. By implementing federal loan consolidation, the loan is repayable in 20 years, and the monthly amount is only 46% of the anticipated $400. Now, the payments are a manageable $184/per month.
One problem. Consider the following scenario: a student earns a two-year degree at a local community college to save some money. Then, he/she transfers to a university to complete a four-year program. A Master's in a particular field is only offered at selected locations, so transferring is again necessary. Three different schools. Three different sets of lenders. No problem!
Federal loan consolidation will combine all the loans, pay off the necessary lenders, and leave only one bill, one lender, to repay. So, whether an individual goes to one university or four, federal loan consolidation will not only reduce the payment amount, but make repayment infinitely easier, in the long run.
The only drawback of federal loan consolidation, worth mentioning, is the reduced grace period. If a graduate decides consolidation is the right choice, the process must be completed before the six-month post-education period expires. Unfortunately, once the federal loan consolidation process has been completed, the repayment process begins. The borrower loses any remaining grace period.
However, since federal loan consolidation can save a former student from drowning under the weight of two, or more, loans, giving up a couple months of grace period is a small price to pay. Unless a graduate lands the perfect dream job right after the caps are tossed in the air, federal loan consolidation can be a lifesaver.
In some cases federal loans are available through the Veteran's Administration for housing. Federal loans can help for disaster relief, or agricultural needs for farmers and ranchers. However, when discussing federal loan consolidation, most people immediately consider the unsubsidized and subsidized money used to finance a college education.
A college education is a costly venture, yet definitely worth the investment of time and money. However, the tuition and fees often discourage some potential students from trading in the spatula of a fast food restaurant, and picking up a textbook. A post-secondary degree program seems like an impossible dream, rather than an obtainable goal.
Nevertheless, after careful consideration, and a brief visit with a financial aid officer, unsubsidized and subsidized student loans are available for a two-year degree, a Bachelor's, a Masters, or a Doctorate. Federal loans consolidation takes place AFTER an individual is done receiving a formal education. The loans are usually made available every year.
Because the cost of learning is beyond the average pocketbook, many students take advantage of both a subsidized and unsubsidized loan, with the plan to take advantage of federal loan consolidation after school. Once accepted for the federal loan program, students are offered the opportunity to accept, or reject, a student loan at the beginning of the school year. In many cases, both types of loans are presented, to give an individual the extra money needed to pay off expenses, and maybe have a little left to live on, without having to hold down a full-time job.
If only one loan is needed, opt to accept the subsidized version. Not only will the payment schedule not be instituted until six months after leaving school, but also the interest will not start accruing either. Although interest may seem like small potatoes, in the long-term, subsidized loans can save thousands in repayment dollars.
When more financial assistance is necessary, an unsubsidized student loan is also available, and the financial aid will later qualify for federal loan consolidation. However, for this particular avenue of financial assistance, the interest starts building immediately, even though repayment is still not required until after graduation.
So, imagine both loans were necessary to complete a degree program. Before the six-month grace period has expired, federal loan consolidation can be implemented, saving up to 54% in monthly payment amounts. How? Prior to consolidation, the length of the loan is ten years. If the loans are consolidated, the length of the loan can be extended by five-ten years, making the payments more affordable.
In addition, federal loan consolidation also reduces the ultimate interest rate. Thus, the two monthly payments combined will probably be less than repayment of one loan individually. For example, the unsubsidized loan payment may be around $200/per month. In addition, the subsidized loan is going to be another $200. Two separate bills, one big chuck of the monthly income. By implementing federal loan consolidation, the loan is repayable in 20 years, and the monthly amount is only 46% of the anticipated $400. Now, the payments are a manageable $184/per month.
One problem. Consider the following scenario: a student earns a two-year degree at a local community college to save some money. Then, he/she transfers to a university to complete a four-year program. A Master's in a particular field is only offered at selected locations, so transferring is again necessary. Three different schools. Three different sets of lenders. No problem!
Federal loan consolidation will combine all the loans, pay off the necessary lenders, and leave only one bill, one lender, to repay. So, whether an individual goes to one university or four, federal loan consolidation will not only reduce the payment amount, but make repayment infinitely easier, in the long run.
The only drawback of federal loan consolidation, worth mentioning, is the reduced grace period. If a graduate decides consolidation is the right choice, the process must be completed before the six-month post-education period expires. Unfortunately, once the federal loan consolidation process has been completed, the repayment process begins. The borrower loses any remaining grace period.
However, since federal loan consolidation can save a former student from drowning under the weight of two, or more, loans, giving up a couple months of grace period is a small price to pay. Unless a graduate lands the perfect dream job right after the caps are tossed in the air, federal loan consolidation can be a lifesaver.
Subscribe to:
Posts (Atom)