When consolidating your student loans you’ll be combining your federal and single loans with only one single monthly repayment. This can reduce you repayments which are required under the 10 year repayment plan. Only lenders that are under the Federal Family Education Loan (FFEL) program can provide consolidation loans. So you can consolidate your loans with banks, credit unions, secondary markets and other lenders besides private education lenders. The government provides their loans under the William D. Ford Federal Direct Loan (Direct Loan) program.
If you have a federal education loan then you’re most likely eligible for student loan consolidation. This also applies to subsidized and unsubsidized Direct and FFEL loans, Federal Nursing loans, SLS and Health Edu Assistance loans. But if you have a student loan that is private then you won’t be able to consolidate your federal loan. And if you’re a parent then you’ll also be able to qualify for loan consolidation.
Once you’ve figured out that you need to consolidate your federal loans then the next step is finding the right lender. If you want to apply for a Direct Loan consolidation or a FFEL consolidation you can apply online. Just do a quick search for direct loan or FFEL loan consolidation and visit the top 3 lenders websites. There will be online application available for you and you can even get a response within days.
You can also contact the lender to apply via telephone if you’re not sure about the online application. You’ll receive the standard consumer disclosure statements and all the fine print detail which I suggest you read very carefully.
Make sure when you read the fine print to any loan that you look for any hidden fees. Nothing worse then signing up to a lender who’s going to make you pay more for you loan then you expected. Hidden charges are very common with low interest rates. You don’t want to look for a lender who’s offering the lowest rate in town without any pre requirements from you.
Most lenders offer average rates but if you pay on time or if you open up a banking account with them you can lower your rates. You should compare rates between various lenders before you consider signing up. Ask each lender about all their hidden charges. They have to tell you any hidden charges if any by law. Compare rates and repayments thoroughly. You’ll soon find which lender has the better offer which is often not the lowest interest rate. It pays to be through so good luck with your consolidation loan hunting.
By: Jackson Summers
Posts Tagged ‘Assistance Loans’
Can I Consolidate My Government Student Loan?
January 3rd, 2010Some Facts About Consolidating Student Loans
November 25th, 2009
With increased demand for better education, the college and school fees have also increased. As a result, most students have huge student loans by the time they complete their studies. Most federal education loans offer an option that may reduce the burden of student loans.
The following loans come under consolidation criteria:
1) Subsidized government student loan.
2) Unsubsidized government student loan.
3) Federal Nursing Loans.
4) Federal Perkins Loans.
5) Health Education Assistance Loans.
Always keep in mind that Private student loans do not fall in this criterion.
Government Student Loan Consolidation allows you to combine all federal student loans with one monthly payment. One monthly payment after the consolidation of government student loan will be lower than the payment required under the 15 or 20 year repayment option.
Process of Government Student Loan Consolidation:
To apply for a government student loan consolidation you must fill an application form and contact the lender. To apply for consolidation, you can use online facility provided by your borrower or you can request an application form on telephone in case your borrower does not provide online facility. After receiving your completed application, the lender will request information from your other lenders. Then the borrower will receive notification about consolidation loan, normal consumer disclosures and the amount owed.
Always Consider the Cost
Consolidation is simply an option of loan repayment, which lowers down your monthly repayment but mostly it increases the total repaying amount, as it increases time period upto 30 years allowing you more time to pay the same amount. Thus, you should compare your consolidated repayment with an unconsolidated one-if there is a big difference then you should find out some other option to solve your problem. Confirm whether you are losing interest rate discounts, principal rebates or any loan cancellation benefits.
By: Oliver Turner