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 ‘Loan Consolidation’
Debt Consolidation – Consolidate Your Student Loans Now!
February 4th, 2010Smart Student Loan Consolidating
February 4th, 2010
Attending college is a fantastic experience. It’s a totally unique experience from high school, especially if your college has a large campus. There are many different activities that colleges offer students, far more than any high school can. Also many new people to meet, from all over the world. Going to college can be wonderful.
But it can be a pain too, if you have to pay for it. And if you needed to fund your tuition and other expenses with student loans, then it becomes really painful when you have to start paying those bills. Plus you have to pay the interest on what you borrowed too.
If you are in this fix, where you know your bills and interest will be too high, then there is one sensible idea to try. You can consolidate your student loans. Doing so will allow you to minimize your payments and significantly reduce your interest rate.
What often happens with college students who have taken out loans, is that they forget about them. It’s not hard to understand though, because college life can be so hectic. When diploma time comes, the loans are all but forgotten. That is, until the bills start coming in.
These same students also forget that they may have borrowed money from more than one lender. So after school they start getting bills from all over. And then life gets really hectic, keeping all the bills straight.
But to assist in this problem, students look to student loan debt consolidation. Then their monthly payments can be merged into one smaller monthly payment.
There are several loan consolidation services that can be found online. One such service is at NextStudent.com. They have a very informative website, and offer free one-on-one counseling, as well as low interest rates.
There are several student loan debt consolidation sites on the web. If you are in a bind with trying to pay your loans, then please do a search online right away, I’m sure you’ll find a service that will dramatically improve your financial circumstances.
By: Jim Konerko
Should I Consolidate My Private Student Loans?
January 16th, 2010
After successfully completing a college degree, many graduates are left with mounting student loan debt which they will need to begin repaying six months after accomplishing their education goal. This triumph can feel like defeat if after the six month grace period, he or she does not have a job that pays enough to meet the minimum monthly repayment amount.
This begs the question, should I consolidate my private student loans? To get some relief from the debt, this might be a viable option to consider. Consolidation can significantly lower your monthly payments by combining separate loans into one manageable loan. Stress is also reduced because you will feel more in control of your finances and not regret continuing your education.
Why Should I Consolidate My Private Student Loans?
If reducing the amount of stress you experience every month is not reason enough to consolidate your student loans, there are other reasons to consider which might be convincing.
Having lower monthly payments will extend the repayment term, giving you additional time to payoff the loans. Several different loans mean that you may have several different interest rates which add up to one big rate. Maintaining a good credit history equals lower interest rates.
If learning that lower payments, extended repayment term, and a lower interest rate isn’t enough and you are still wondering whether you should consolidate private student loans, maybe this will convince you.
Loan consolidation is not limited to certain types. If you are seriously considering consolidating, all private student loans are eligible. With a graduate degree, you can consolidate your undergraduate and graduate degree loans without the help of a cosigner. However, having a willing cosigner might help you receive an even lower interest rate.
What Information is Necessary To Consolidate?
Once you have decided that consolidating your private student loans is the right financial decision, you must be prepared to provide specific information on the application such as your name, address, social security number, contact information for personal references, detailed information on your monthly income and expenses. This information is also needed on the cosigner for your loan.
For each loan that is to be consolidated, you will need the account number; name, address and telephone number for each loan servicer; and, the loan balance and payoff amount.
Hopefully, this information has helped you consider the question, should I consolidate my private student loans.
By: Louis Z.