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
Posts Tagged ‘Federal Loan’
Debt Consolidation – Consolidate Your Student Loans Now!
February 4th, 2010Consolidate Student Federal Loan
January 17th, 2010
What is Student Loan Consolidation?
With all that you’ve heard about student loan consolidation, you might still not know what student loan consolidation actually is. Well, here’s a pretty good explanation. This type of loan is basically taking all of your federal student loans that have gathered up to grow unmanageable over the years and gathering them into one manageable loan. Student loan consolidation is good because it can save you money and takes away the confusion of trying to keep up with all the incoming bills and outgoing checks to make it easier for you to enjoy life and stop worrying about money.
Below are some factors you should look into before deciding that student loan consolidation is right for you or deciding that it isn’t right for you. Remember to look into the facts before passing an unfair judgment, however tempting it may be to do.
The Consequences – Hopefully you’re able to get all your loan payment in on time, and that’s a great thing, but you should still be aware of what happens when you’re unable to pay the money you owe for loans. You may know what happens, and may have even experienced it yourself. If you have experienced it, you still may not know all the consequences and all the facts. Obviously it’s not good at all to skip payments, even if it’s accidental, and you obviously have to end up paying the missed payments, probably even more because of the added interest. However, the more payment you miss, the greater the consequence grows. In the end, you could end up going in to default, which will make a major impact (for the worse, of course) on your credit score.
A Blacked Road – Thought for some it may seem that student loan consolidation is the cure to your problems; a last avenue that will make everything better and restore your bank account and credit score to perfect order, but this isn’t so. Truthfully, there is no “miracle treatment”. Thought student loan consolidation can be a very helpful tool, it doesn’t always work out as planned. If you don’t meet the necessary conditions, your application for the loan could be rejected, so make sure that you’re prepared with the necessary information and tools.
These are just a few of the many facts about these loans. Make sure to look into all of your options and find the information you need to make an educated decision.
By: Darrell Wiggett
Can I Consolidate My Government Student Loan?
January 3rd, 2010
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