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Consolidating Your Student Loan

February 5th, 2010



Student loan consolidation is a very important move in your financial life. This is usually the first thing college graduates can do to move toward a solid financial future.

There are many programs offered today that can benefit recent graduates. When starting a new life after college most people carry the burden of debt straight out of school with them. This will sometimes lead to making bad financial decisions right out of the gate. These decisions can haunt you for years and if they cause you to get bad credit scores the problems can last decades. The best option is usually to consolidate your bills to achieve a lower monthly payment that will be manageable for your future.

This frees up cash on hand each month to put toward other bills such as rent and utilities. By consolidating your student loans into one lower monthly bill you will also be able create an effective budget that will set you the right path early in life. This path is critical to the quality of life you will enjoy your entire life. I know that most young people think they have plenty of time, but the decisions that are made during the first 5 years of your working career can have the most financial impact on your retirement.
As odd as it sounds consolidating your student loans is the first step in achieving the retirement lifestyle that you want and deserve. Take advantage of the many resources of the internet today and start to plan for tomorrow.

By: Tim Grimsley

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What You Need to Know about Consolidating Student Loans

January 12th, 2010



Chances are if you’ve taken out student loans in order to finance your education you have been, or at least will be, receiving calls and offers in the mail to consolidate your student loans. There are actually numerous advantages to consolidating your student loans. In addition to gaining a fixed interest rate you can also potentially lower your monthly payments. In the event that you begin to experience financial difficulties, you may also be able to take advantage of flexible payment options with a consolidated student loan.

Unlike other types of debt consolidation programs a student loan consolidation gives you the opportunity to combine your loans into one package with more attractive terms. You also don’t have to worry about being turned down because of a bad credit score and the interest on the loan may be tax deductible. In addition, in the event of your death your survivors won’t have to worry about paying it back because the debt will be discharged.

If you have a variable interest rate student loan, consolidating the loan can also help you to lock in a lower rate before the rates increase the next year. Over the length of the loan, this one step can actually help to save you a tremendous amount of money.

Of course, in addition to the advantages there are also some disadvantages of which you should be aware. One of the most important is that if you end up lowering your monthly payment you are actually extending the length of the loan and that means you’ll pay more over the life of the loan due to increased interest. You can still take advantage of the other benefits of a student loan consolidation without this disadvantage; however. Just don’t lower your payments unless it is really necessary.

When considering lenders for a student loan consolidation it is important that you always compare the terms of each offer made to you. Consider the interest rate and length of the repayment terms to be sure you are getting the best deal possible.

If you have a mix of both federal and private student loans, you should also be aware that while both types of loans are available to be consolidated it may not be a good idea to consolidate your federal loans and private loans together in the same package. There are stipulations on private loans that are not required on federal student loans, such as no deferments, no tax deductions on the interest, no forgiveness of the debt in the event of death and no forgiveness of the loan for working in certain fields. In the event of a mix of private and federal, it’s usually best to go ahead and consolidate the private loans separately from the federal loans so that you can retain those advantages for the federal loans.

By understanding all of the factors related to student loan consolidation you will be in a better position to make a more informed decision regarding your finances.

By: Joseph Kenny

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Consolidate Private Student Loans

January 10th, 2010



It is naturally a much better option to consolidate private student loan programs than it is to default on a private school loan. It can be very difficult to graduate, find a high paying job that will set you up, and balance your daily needs with your school loan payment. However, this is exactly what financial institutions expect you to do.

The absolute greatest benefit to being able to consolidate a private student loan is that you will have more financial options at the end of every month. While it is true that loan consolidation programs may be reported on your credit, it is certainly not nearly as damaging as a defaulted school loan being reported on your credit. Choose wisely and carefully, as you might need to make this choice without enough time to thoroughly investigate your options.

It seems like you should be able to simply stop paying on your school loan. It’s not like a car that they can come repossess or an apartment rental default that can evict you, right? So when money is tight and there are choices to be made, the school loan is the easy one to ignore. They can’t repossess an education.

Yet it isn’t this simple. Your bad credit could end up making your education rather useless if you have to pass a security clearance for your position. This will obviously hold your income down. Defaulting on even a private school loan can still lead to consequences like garnished wages and tax refund checks.

In order to effectively consolidate private student loan programs, you have to work with the right agency. There are those that have stricter requirements than others, and there are those that have more determined aspects than others. GPA and payment history may or may not factor in, so be sure to ask a lot of questions about how you qualify.

In order to consolidate a private student loan you are probably just going to have to fill out some applications (usually online) and then talk with the credit relief agent that can lower your payment. Lowering your monthly payment gives you more breathing room than before. You can often find that you’re paying between 25% and 50% less with a consolidation.

Before you consolidate private student loan agreements and programs, make sure you know what you’re getting in advance. Ask how much goes to the loan and how much is kept by the agency. You will hear a surprising number of different answers. A consolidation program for a school loan might be just want the money doctor ordered for some peace of mind and some more fluid income.

By: Charles Gloson

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