College Loan Consolidation - What to Know Before You Refinance or Consolidate

By Lynn Haehl

There are many advantages to a student loan consolidation or refinance. College graduates typically receive funds from multiple lenders, which can mean more than one monthly statement. In addition, some graduates have loans with variable rates, which can increase or decrease according to the current market rate. A college loan consolidation is the perfect way to simplify your finances. With this option, you receive one monthly statement and deal with one lender. However, to benefit the most from a consolidation or refinance, make sure you know how they work.

What is a Student Loan Consolidation or Refinance?

The ultimate goal of a college loan consolidation or refinance is to reduce your monthly debt payments. On average, graduates are only given a grace period of six months. It can be difficult to find a good paying job within six months. What's more, it can be hard to afford a high student loan payment. With a consolidation or refinance, graduates can combine all their student loans into one new loan and receive a lower rate. The monthly payment on the combined principal is normally less.

Why Consolidate or Refinance a College Loan?

Graduates consolidate or refinance their student loans for three major reasons. One, they want to lock in a low interest rate. Since a majority of student loans have a variable rate, monthly payments can rise or fall with every rate adjustment. On the other hand, fixed-rate student loans are predictable and the payments remain the same. The second reason is to simplify finances. It is easier to manage one student loan payment as opposed to two or three. Lastly, consolidations and refinances offer several repayment options, which help keep payment lows. Choose a standard payoff time of 10 years, or extend the loan to 30 years.

What to Know Before a Consolidation or Refinance

Although a college loan consolidation offers lower payments and extended loan terms, these options increase the overall costs because you'll pay additional interest. Making a few extra payments throughout the year, or paying a little more on the principal each month will help reduce the total interest cost.

Another drawback with a student loan consolidation or refinance is that you might lose your grace period. Federal Direct Consolidations uphold a grace period. Other consolidated loan programs such as Stafford do not offer a grace period. If you need a grace period, do some research before applying for a consolidation or refinance.

Save up to $100's monthly by using one of our Recommended School Loan Consolidators Online. We maintain recommendations for both private and federally funded consolidators. Article Source: http://EzineArticles.com/?expert=Lynn_Haehl

College Loan Consolidation - What You Need To Know

By Rob Hickey

The rise in demand for college loan consolidation services is directly related to the costs involved with getting a college or university degree. Fueling the demand is the increasing cost of private institutions in the United States. Whether it’s for graduate school or to study abroad, students are accruing massive debts beyond what was reasonable years ago. The gap is widening between the cost of obtaining a degree and the financial aid given to assist those in need of funds. Today’s graduating students are faced with a vicious cycle of borrowing more in order to pay college tuition. College loan consolidation can ease the burden after graduation by setting up a program to help manage your college debt.

College loan consolidation is a service that allows students to reduce the amount of their monthly installments in order to repay their student loans. This is done through one combined loan with an extended payment schedule which results in a smaller monthly payment. There are other benefits as well. Did you know that you could potentially save thousands of dollars in student loan interest fees over the life of your loan? By locking in fixed interest rates you can help avoid fluctuating interest fees. The savings on fees and lower monthly payments gives you more flexibility with your money. You could either save the money, invest it, or take a well deserved vacation.

Keep in mind that if you are thinking of college loan consolidation, that it is a good idea to separate the consolidation of your private student loans and your federal student loans. A potential downside to combining both is that you could lose the interest tax deduction benefit on your federal student loans.

On a final note, the lender you choose plays an important part in the college loan consolidation process so it is important to find a reputable company which has evidence of its credibility. Interestingly, some lenders may offer incentives via an interest rate reduction if past student loan payments were made consecutively on time. It is just a matter of taking the time to compare different incentives between lending companies. Loan counselors should be able to assist you on the site of your choice to help you decide if what they are offering is what's best for you.

College loan consolidation is a worthwhile option and can help to put more cash in your pocket. Currently, interest rates are quite low so now is a good time to research lenders and take advantage of the benefits.

For more information on college loan consolidation, visit http://www.student-loan-zone.com Article Source: http://EzineArticles.com/?expert=Rob_Hickey

How To Get A Handle On College Loan Consolidation

By Jon Arnold

If you are going to graduate from college soon or have recently graduated, chances are high that you have a ton of student loans that will need to be paid back. It's pretty nice when you are still in school, since most of those programs don't require that you start making payments on the loan until after you graduate. But after you graduate, it may come as a very rude awakening that you now need to start making payments on that huge figure, which could be as much as $40,000 or even more.

Hopefully while you were in college, you also had a credit card in your name and made regular payments so at least you've got a good start on having a decent credit score. This is important because as you start to enter the very competitive job market, more and more employers are starting to look at a job candidate's credit score as one of the factors to determine if the job should be offered, and if so, at what salary.

But a huge downside here is that can you maintain your good credit score now that you are taking on payments on that huge college loan bill? If it starts to tarnish your credit score, even at the low interest rates that many student loans carry, chances are good that your future job promotion opportunities will be diminished as your credit score starts a downward spiral.

There are many ways to approach this situation, but one of the easiest and often overlooked options is a college loan consolidation program. This is significantly different from a personal loan, because with a personal loan, you are given the money and expected to put it all on your student loan bill. The temptation to skim some money off the top of that loan and put "most" of it instead of ALL of it on your student loan is frequently too difficult to resist. Besides that, getting a personal loan for that huge amount of money is going to be almost impossible, especially at the extremely high interest rates you would get, which would almost certainly be much higher than the interest rate on your existing student loan.

A college loan consolidation program can help. You are not given the money up front, so the temptation to spend it elsewhere is not an option for you. As long as you are making regular and timely payments to the debt consolidation loan company, your student loan obligations are being met, and your credit score and credit report do not suffer.

So why get into a situation where it appears that you are borrowing from Peter to pay Paul? The biggest advantage with a student loan consolidation or college bill consolidation program is that typically your monthly payment amount is less, sometimes significantly less than if you did not enroll in the program. Remember, part of the whole equation here is to lessen the amount of money going out of your pockets every month, and a college loan consolidation can do that for you.

Don't allow yourself to be at a disadvantage in today's job market by having this huge debt hanging over your head. Look into a college loan consolidation program to give yourself the financial breathing room you need as you venture into the real world.

For more insights and additional information about College Loan Consolidation as well as getting a free no-obligation college loan consolidation quote, please visit our web site at http://www.debtconsolidationstrategies.com Article Source: http://EzineArticles.com/?expert=Jon_Arnold

Find Out How to do College Loan Consolidation

By Jon Arnold

For the good majority of those that have attended college, there are debts to be paid off after you’ve graduated. Tuition costs continue to rise and sometimes it takes more than one loan to pay for those additional costs.

When you’ve had your graduation ceremony, have or have not gotten a job, and six months have gone by you will be expected to start paying those loans back. A college loan consolidation can make that repayment easier on you and your bank account.

There are many companies and banks that offer student loan consolidations. These will take all loans that you have taken during your time in college and combine them into one lump sum. That lump sum will be given one interest rate that will often be less than the interest rate that you’ll get from the loan repayment plan you’re given when you’re close to graduation. You will be able to make smaller payments and work toward the ultimate goal of paying off your student loans.

As you are looking for a student loan consolidation company, be fully aware that there can be huge differences in how their program operates. Be sure to compare costs and interest rates especially. Also be on the lookout for those companies who charge a fee for early pre-payment of the loan they give you, which only serves to lock in the interest that they will be collecting from you on this loan.

Most of the loan consolidation companies will offer an interest rate that is preferable to the one you are paying. If you have more than one student loan, you are paying that interest rate more than one time every month. When it comes right down to it you may end up paying far more than the amount you borrowed if paid over a long period of time.

The consolidation loan will give you the benefit of only paying an interest charge one time per month. This interest rate may be 4 or 5% whereas the student loans that you will be starting to pay back at the end of your six month grace period may be 7 or 8%. Many of the consolidation companies will not have a penalty for early payment, but some of them might. Be sure to find out if this is a penalty before you agree to the consolidation. Be well aware of the details of your payback agreement before you sign the papers for the loan.

Each student loan consolidation company will offer something to appeal to you as a way to earn your business. Find the one that will work the best with your needs and will charge you the least amount of interest. This can save you thousands in the long run and make the payback of your student loan as simple and pain free as possible. Since your goal is to pay off your student loan, the last thing you want to do is rob Peter to pay Paul with another loan, which leaves you in the same situation you are now!

For more insights and additional information about College Loan Consolidation please visit our web site at http://www.debtconsolidationstrategies.com Article Source: http://EzineArticles.com/?expert=Jon_Arnold

Discovering The Benefits Of A College Loan Consolidation

By Jon Arnold

With the rising cost of education expenses in today's society, we find that it can cost just as much to complete our education as our first home purchase. The only problem is that in order to get our education we have generally have more than one or two student loans that we will have to pay back. Education prices continue to go up, cost of living expenses go up, yet our pay seems to have stalled somewhere around 1980.

So by the time we have finished school we are already in debt up to our ears just with the student loans that have to be repaid. So how do you cope with your other living expenses like food, car payments and rent when your student loan payments take so much of your much-needed income. The answer is with a college loan consolidation.

The benefit of a college loan consolidation is that you can combine your student loans into one loan and have only one payment. You save time and money when you do this. No more will you have to make multiple monthly payments and lower interest cost. You will be able to budget your income and expenses more easily when you do a college loan consolidation and you will find that you have a little more to go around.

When looking into college loan consolidation you will find that for Federally backed loans if you consolidate soon after you complete college, while you are in your six month grace period, you will get a better interest rate. You will also have more options when it comes to the kind of repayment schedules available.

You may choose to pay a fixed amount over a maximum of 10 years to pay your loans off more quickly; or you can get a graduated payment schedule which will fix you with a lower payment during the first 24 months and then increase the payments every 24 months, hoping your income also increases, and spread your loan out over 12 to 30 years. Another college loan consolidation payment option that can be paid back between 12 and 30 years is to have fixed payments over an extended period and with this option the repayment period is based on how much you have in student loans. Then if you find that your income is not what you expect it to be, you can do an income contingency plan over a period of up to 25 years, which is based on your adjusted gross household income, number of family members in the home and how much you owe.

A really good thing about a college loan consolidation is that if you choose one method of repayment and then find that it does not work for you then you can request that your repayment plan be changed.

Some student loans have additional rules when it comes to doing a college loan consolidation. For example a Perkins loan cannot be consolidated unless you combine it with a least one direct FELP loan such as a Federal Stafford Loan previously known as a Guaranteed Student Loan.

When you are looking into college loan consolidation you should speak with several lenders either locally or over the internet to see who will be offering you the best rate and service. When you decide on the lender make sure you understand any special conditions or fees and the terms of the college loan consolidation before signing any papers.

For more insights and additional information about a College Loan Consolidation and to get a free quote on college loan consolidation, please visit our web site at http://www.debtconsolidationstrategies.com Article Source: http://EzineArticles.com/?expert=Jon_Arnold

College Loan Consolidation - Knowing The Limitations

By Mila Spivak

With the average college graduate leaving university with approximately $20,000 in debt, there is no doubt that college loan consolidation is an effective financial loan option for graduates. By consolidating college loans, graduates will be able to reduce their monthly payments, gain flexibility in repayment options, reduce their numerous monthly repayments into one manageable monthly payment, in some cases reset the clock on deferments and forbearances and gain favourable interest rate discounts and rebates. However, before you decide to consolidate your college loans, you need to be aware of certain limitations and potential drawbacks. These don’t necessarily mean you need to rethink consolidation all together but rather guide you through aspects you need to consider before finally taking the plunge and consolidating all your college loans into one.

The first thing to keep in mind is that you can only consolidate your college loans once. Once you have done so, you will not be able to re-consolidate your loan with another lender. The exception to this rule is when you have left some loans out from the total consolidated amount and now wish to add on more loans. In this case, it will be considered as a new consolidation and you could potentially switch to a more favourable lender.

Another point to consider is the level of discounts you could receive when consolidating college loans. The discounts in interest rates given if you set up monthly bank transfers or you always pay on time are small compared to other financial services. The lenders blame squeezed margins on their college loan consolidation products due to regulations. As such you can expect to receive a maximum of 0.25% in interest rate reductions if you set up a monthly bank transfer and around 1% in interest rate reductions if you don’t miss a payment within the first 36 months of the term.

If you are married and you are now both ready to consolidate your loans, you will not be able to consolidate your partner’s and your loans into one. Since July 1 2006, married graduates will not be able to consolidate their loans together due to potential difficulties if the couple decides to split.

When you have decided to consolidate your college loans, keep in mind that by consolidating you will loose all your interest benefits obtained with Perkins Loan. The good news is that if you have Stafford loans, you keep all the subsidized benefits.

Finally, in most cases, lenders can only offer you college loan consolidation product only if you have $7,500 or more in college debt.

College loan consolidation is not an easy decision and should not be taken lightly. Although it has clear benefits for many graduates and their borrowing parents, you still need to consider all the limitations.

For a complete guide to college loan consolidation, visit www.college-loan-consolidation-help.com Article Source: http://EzineArticles.com/?expert=Mila_Spivak

College Loan Consolidation - The Basics

By Mila Spivak

When you consolidate your college debt, you simply combine several of your student or parent loans together into one loan from a single lender. As a result, you end up with a single manageable monthly repayment instead of making several monthly repayments at once.

College loan consolidation programs are different from ordinary loans and bring with them a number of important benefits:

- Your credit score will not be analysed

- There is no maximum amount available

- You can potentially postpone repayment

- Debts are forgiven at the death of all borrowers

- Interest paid on college loans could be tax deductible

College Loan Consolidation – The Maths

The interest rate on a consolidation loan is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest 1/8 of a percent and capped at 8.25%.

Here is a typical example:

Jenny has $7,000 worth of Perkins Loans @ 5% and $13,000 worth of Stafford Loans @ 7.5%. When Jenny consolidates her loans into one, her weighted interest average rounded up to the nearest 1/8th of a percent becomes 6.63%. Here is the actual consolidation calculation: (7,000*5% +13,000*7.5%)/7,000+13,000.

When a borrower consolidates a number of loans with different interest rates, the consolidated interest rate is usually lower than the highest of their interest rates, but it is also higher than the lowest of their interest rates. In most cases, if you keep to the same repayment schedule for your consolidated loan as was originally set out in your un-consolidated loans (e.g. 10 years), then the amount of interest you pay over the lifetime of the consolidated loan will be about the same. That been said, there are a number of important benefits that college loan consolidation provides that makes it a very popular financial lending option for graduates.

College Loan Consolidation – The Advantages

One Simple Monthly Repayment - A college borrower can really appreciate the manageability of a consolidated loan when they have multiply loans to manage. Consolidating all the loans into one makes the complexity of multiple loans disappear leaving a borrower with a single monthly repayment.

Alternative Repayment Plans - When you consolidate your college loans, you could potentially take advance of alternative repayment plans which usually become available if the total loan balance is higher. For example, instead of paying back your college consolidation loan in 10 years, you could consider extending the repayment plan to 20 years which will substantially reduce your monthly repayments. In some cases, monthly repayments can go down by as much as 50%. Depending on your circumstances, extending your repayments can make the overall loan more affordable and manageable. However, bear in mind that if you extend your repayments, you will end up paying more interest over the lifetime of the loan. That been said, this option suites many graduates that have other financial commitments and cannot stretch to fully repay the loan in 10 years.

Consolidation resets the clock on deferments and forbearances - In most cases, college loan consolidation resets the 3-year clock on certain deferments and forbearances. As consolidation loan is classed as a new loan, it brings with itself its own set of new deferments and forbearances. This factor is particularly useful for medical students who do not get an in-school deferment during the internship and residency periods.

Consolidating while already in repayment - If you have loans already in repayment then consolidating your loans earlier on could potentially lower your monthly repayments even if you stick to a standard 10 year plan. However, if you are close to the end of the repayment period on your loan, then consolidating may not be the ideal solution.

The benefit of shopping around - If you decide to consolidate your college loans then you can spend time shopping around for the best lender who will give you a higher interest rate discount and better rebates on the fees.

For more information, visit College Loan Consolidation where you will find other useful articles, news and featured college consolidation suppliers.

© Mila Spivak. All rights reserved. This article may be freely distributed as long as the content and active links remain intact. No alteration is allowed without express written permission from the author. For more information, visit http://www.college-loan-consolidation-help.com Article Source: http://EzineArticles.com/?expert=Mila_Spivak