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 Terms’
Debt Consolidation – Consolidate Your Student Loans Now!
February 4th, 2010Consolidating Your Student Loan
January 25th, 2010
When getting out of college many students are faced with the fact that student loan repayment beings shortly there after. Consolidating your student loans down to one payment can greatly reduce the amount of money you will pay on interest alone by a sizeable amount in the long run.
Student loans tend to have a repayment period anywhere form 10 to 20 years. This makes it possible for the parents and students to repay the loan without feeling bogged down. However repaying the loans over a longer period can result in higher interest rates which results in more money out of your pocket.
When applying for a student consolidation loan, you are trying to lower the balances of all your loans into one lump sum payment. Balances from other loans can easily be transferred from one lender to another. Some place to look into in regards to consolidating students loans are Perkins, Stafford, FISL and HEAL. It is possible that some lenders will consolidate the student loan as a private loan as well.
Paying off a student loan in less than 10 years may reduce the monthly payment without extending the overall loan terms beyond 10 years. However, missing just one payment could increase your interest rate on the loan raising your overall monthly payment. It’s important to remember that if a student consolidates their loan before they begin making monthly payments, the interest rate could be much lower.
In some cases students have trouble paying off their student loans having just gotten out of college and in search for a nice paying job. There are specific plans that will allow a student to adjust their monthly payments on a sliding scale that start out with a low monthly payment and increase slightly every few years. This student loan consolidation method is quite popular by many since it allows for the low monthly payments initially, giving the students plenty of time to increase their salary over the upcoming years.
By: Timothy Rohrer
Consolidate Student Loans – Your Monetary Ladder to Success
December 5th, 2009
Higher education matters a lot in shaping one’s future. But financial constraints may cause many people’s dream to be shattered. Just taking a loan to support your higher education may not be the needful. To have better terms and conditions for the loans and to help you repay your student loan for financing your higher studies may do the trick. Consolidate student loans score high here.
Features
These loans actually mean paying off the loans you had taken for your higher studies and somehow failed to pay it back. Also, if you are already under different types of loans to finance your education, consolidate student loans pay them for you, and you come directly under a single loan. Here, you may also bargain the interest rates and loan terms irrespective of the original terms and conditions. Also these loans are available online, so you don’t need to run around for your loan approval. Secured and unsecured are the two significant forms of availability of these loans. For a secured loan you have to mortgage some of your property to bid against the amount of the loan. However, these loans may bring you better interest rates and terms and conditions. However, if you are afraid of putting your property at stake to consolidate your student loan, unsecured version of these loans are for you.
Eligibility and availability
Any UK citizen who is presently under a student loan may apply for consolidate student loans. However, the applicant or the cosigner or both must be of 18 years. All you need is to show the identity proof, address proof and some property documents, if you have applied for the secured student debt consolidation. You are applicable even if you have bad credit history, CCJs, arrears etc against you. These loans are available for a period ranging from 3 to 25 years. The interest rates may vary from 7% to 19% for different moneylenders and depending on your present credit status.
By: Steve C Clark