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Student loans can be private or federal loans. There are many ways of paying these student loans one being through loan consolidation. Student loan Consolidation is a method of combining several student loans either private or federal into one bigger loan from a single lender, which is then used to make payments on the other loans. Student loan consolidation is the same as financing a mortgage. Before making a step to consolidate loans a student should do enough research to know whether consolidation will make any sense to the loan repayment. One should be aware of brokers who are always there for a commission. It is clear that there are no costs for consolidating student loans apart from the slight increase in the interest rate on the consolidation loan. Students can only consolidate their education loans after the loans enter repayment or during the grace period. One may ask if default loans can be consolidated, the answer is yes. Default loans can only be consolidated if they have satisfactory repayment arrangements. While students who are still in school, they can no longer consolidate their loans.


All federal education loans can be consolidated. A single loan consolidation can also be reconsolidated although there are a few restrictions. The loans that were not previously consolidated to the consolidation loan must be added during reconsolidation. Even two consolidation loans can be consolidated together. Reconsolidating a consolidation loan does not relock the rates on the consolidation loan. Within the weighted average interest rate formula used to calculate the rate on the new consolidation loan, consolidation is considered as a fixed rate loan. The ability to use consolidation to switch lenders is limited because only the direct loan program can make new federal consolidation loans.


Federal student loans and private student loans are consolidated to lower monthly payments and simplify finance management. When a student has the two loans that is federal and private loans,  the federal loan is consolidated first before consolidating the private one. This allows him or her to refinance all non federal education related debts. Consolidation increases monthly savings providing payment relief to the student after graduation.


There are some benefits associated with federal loan consolidation. Some of these benefits are that federal loan consolidation lowers one’s debt to income ratio. This means that someone may be paying a big loan and at the same time living his or her normal life. Federal loan consolidation also improves the credit score of the loanee and also as said earlier reduces monthly payments.  One can stretch his or her loan payment period depending on the total amount of student loan, through student loan consolidation. Since student loan consolidation leads to lower monthly payments, one has approximately enough money to cater for other expenses including housing, carrier related and also luxuries.


Fortunately, technology has developed nowadays which has helped a lot on student loan consolidation application. You do not always have to visit lenders in person to avail your student loan consolidation application. To avoid this, the application can be done online through provided forms in which one has to fill his or her needed details. We also remind you collect various quotes from various lenders and compare them for the favorable one and through this way our loans will be consolidated satisfactorily.