Posts Tagged ‘Consolidation Loans’

Debt Consolidation – Consolidate Your Student Loans Now!

February 4th, 2010



The Federal student loan program has benefited thousands of college students in the forty years since it was introduced. Interest rates for the program have historically been quite competitive, and the program has allowed many people to acquire a college education who otherwise might not have been able to afford one.

At the moment, interest rates on Federal student loans are the lowest in history, but that is about to change. On July 1, 2005, the interest rates on Federal student loans will rise, due to an increase in the price of Treasury, bills, to which the interest rates on student loans are tied.

While an increase in interest rates is seldom viewed as a good thing, knowing about it ahead of can be helpful. Between now and June 30, new graduates or those who have been repaying existing loans can consolidate their student loans at current rates. The rates currently vary, with fixed rates being slightly higher than adjustable rates. Those considering consolidation might wish to convert their loan to a fixed rate. Depending on the amount of the loan, borrowers may extend their loan terms to as long as 30 years.

There is also legislation pending in Congress that would change the Federal loan system so that all future loans are adjustable rate, with no fixed rate option. This will save the government money by not allowing students to lock in long-term loans at low rates during times of increasing interest rates. Students who wish to obtain a fixed rate loan may not have much longer to do so.

Rates will vary slightly from lender to lender, and the market for loan consolidation is quite competitive. Those wishing to consolidate their loans should consider shopping around for the best deal while time permits.

By: Charles Essmeier

Consolidate Student Loans – Time To Pay Less And Get Your Student Debt In Line

February 3rd, 2010



Let’s add some detail to the benefits available to graduates, parents or students who decide to consolidate the loans that have built up over the years of study.

The Consolidation of Student Loans Brings Reduced Payments

When a student gets all his or her loans under the same Social Security number, then the government will agree to consolidate those student loans. The student’s individual loans are paid off, giving the student one large loan.

Moreover, when the government takes steps to consolidate student loans, it also takes two other important steps: It extends the loan and it lowers the loan rate.

There is not set way by which a loan provider can bring down the rate on a consolidated loan. A reputable loan provider carefully examines all the possible ways that a student’s rate might be made lower.

The loan provider then establishes that low rate as the rate for a consolidated and extended loan.

The government’s willingness to both extend the loan and to lower the rate can save students considerable money. Although the payment schedule has been extended, the person with the consolidated loan can feel free to pay the loan off ahead of schedule.

In other words, there is no prepayment penalty levied on those who make an early pay-off after choosing to consolidate student loans.

Two More Reasons to Consolidate Student Loans

It was mentioned above that the rate on a consolidated loan is lower than the rate on each of the original loans. Besides being lower, that rate is also fixed. The rate on a Stafford or Perkins Loan is variable. The rate on a consolidated loan does not change during the course of the loan.

A student with a consolidated loan does not need to spend time keeping track of the payment schedule for two, three or more loans. That student loan recipient can just make a single monthly payment. Often the student elects to make that single payment through an automatic debit.

That can decrease the loan rate by another 0.25%.

Still Other Reasons to Consolidate Student Loans

Gradate students who consolidate student loans can learn then about fellowships and graduate school loans. Parents who consolidate their loans can search for free money or private loans. Those benefits come on top of the loan’s lower interest rate.

When you consolidate student loans, you provide yourself with a chance to improve your credit score. No graduate wants to face credit problems that have been caused by his or her need to take out loans in order to cover college expenses.

In light of all the above benefits, students should ask this question:

Who Can Qualify for the Program to Consolidate Student Loans?

Before allowing a student to consolidate student loans, the government looks to see if the student or graduate owes $10,500 or more. The government also checks to see if the loan recipient has any loans in default.

By: Martin Haworth