If you’re having trouble repaying your private student loans you can get help now with private student loan consolidation payments. A consolidation of student loans both consolidates all your private education loans into one loan and resets the loan’s terms.
Because, for the most part, you can’t consolidate private student loans with federal student loans, the low federal student loan consolidation interest rates would not be applicable. However, it still is possible for you to pay less each month.
You actually have quite a few options that can lower your monthly loan payments.
1. Because your credit score strongly influences your interest rates, if your credit score has significantly risen since you applied for your loan, for example by fifty points or more, you might be able to get a lower rate when you consolidate your loans with a different lender.
After doing your initial research, talk to your current lender and see if they can lower your interest rate on your current loans. They might consider doing this if they see that they could lose your business to a different lender.
2. If you’re a homeowner, compare the interest rate on your variable interest rate school loans to a fixed rate home equity loan rate. If interest rates look like they are going to go up, you may want to get a home equity loan and use the money to pay off your private education loan. Doing this would guarantee that your interest rates will not increase.
On the other hand, it also guarantees that they won’t go down if interest rates fall. And, worst case scenario, you could possibly lose your home, so be cautious with this option.
3. You can consolidate student loans with an educational lender, such as the private consolidation loan divisions of either Wells Fargo, Chase, the Student Loan Network or others.
These companies offer different repayment plans. Some offer up to 15-year term while others offer up to 30-year term. The interest rates they charge as well as fee structures also vary.
Because these differences can amount to thousands of dollars in savings, most people that consider consolidating their student loans do extensive research and even do a spreadsheet analysis comparing the pros and cons of each offer before choosing the option that’s right for them. Luckily, the Internet makes it very easy to get the information you need to make these comparisons.
When you evaluate private lenders consolidation loans, make sure to find out
1. If their interest rates are fixed or variable
2. If there are any prepayment penalties, and
3. Whether or not there are any fees and what they are.
By: Don Granite
Posts Tagged ‘Consolidation Of Student Loans’
How to Lower Your Private Student Loan Consolidation Payments
April 2nd, 2010The Truth About Student Loan Consolidation
January 4th, 2010
You did it
Finally, you’ve completed your education and now you are facing a mountain of student loan repayment notices. They might or might not be from the same lender, and possible they come from more than one degree from different universities. Right now you should be considering consolidation of student loans that dry out you wallet.
Necessary evil
Student loans are a necessary evil for students who can’t afford to pay for their education expenses. It is definitely a better alternative to loan money, than it is to charge a credit card with shameful interest rates. But when those interest statements and payment notices start coming in you mail, it can be a bit scary.
Extra money
Remember the semester where you had to borrow a little extra money? Maybe you could not work as much in that period or because of other reasons. You got to eat right. Food is one of those things that you simply cannot live without. Unfortunately, not all that money was spent on necessities. Be honest now. Which is why you’re properly now are facing your student loan statements in total denial. I am sure it was a fun time back then.
Avoid paying more interest
Of course you have already received solicitations from lenders that have their main focus on consolidation of student loans. You should consider this. Avoid paying more interest than you have to. One thing you must do before you consolidate student loans is to research the market and pick the best option.
Federal law
Federal law mandates that a borrower have to consolidate with the lender that lends the loans if the borrower has all loans with the same lender. If they are held by more than one lender, the borrower is free to consolidate with any of the lenders that are in the federal student loan consolidation program.
Consolidate once
Borrowers may only consolidate once. Depending on the lender there may be additional fees involved. Some companies advertise absurdly low interest rates or reduction of payment, fast approval, or other incentives. Be aware of them and make sure you read the fine print on all your offers for consolidation of student loans.
The student loan consolidation solution
Consolidation of student loans may sound like it is difficult, but it is not. If all your loans are held at the same lender it shouldn’t be hard. Like student financial aid that has come from Department of Education or Sallie Mae Loans are easy to consolidate. The process can be started online for your convenience. There are some good incentives offered: reduction of interest rate up to 2% after 24 repeated withdrawal payments. Consolidation of student loans is a vital financial decision. Select it with as much care as when you picked a college major and applied for a student loan.
By: Finn Jensen