Handling the costs of education can be a daunting task as the costs are high enough. Thus, in order to do higher studies, you might have taken out student or education loans. Now, if you are facing problems in making loan payments against the education loans, you can try to pay off the loans through debt consolidation. Debt consolidation helps in consolidating your educational loans, thereby reducing the interest rate and the number of debts that you have. However, you should know that federal education loans and private loans cannot be consolidated at the same time.
Consolidating the student loans
If you as a borrower have mix of loans, you can consolidate the federal education loans separately with private ones.
In case of the federal student loans, both the students and the parents can consolidate the education loans. There are actually various options through which you can consolidate the federal student loans. But, the married students cannot consolidate the federal loans together. The students are allowed to opt for debt consolidation after the degree gets over or after the deferment period ends.
Actually what happens in consolidation is that all the federal student loans and parent loans gets rolled over as one big loan with lowered interest rate. From 2010 (June 1), however, all the new federal consolidation loans will come from the Direct Loan Program. This means that the FFELP or the Federal Family Education Loan Program will go on to become Direct Loans. However, if you have both FFELP and DL loans, you can consolidate these together.
In order to consolidate the federal loans, it is important for you to have at least one federal student loan. But, there is no minimum balance required by the US Department of Education for you to consolidate the loans, the loan will have new payment term. After the consolidation, the repayment schedule will be reset to standard repayment. The borrowers who opt to consolidate the Federal Family Education Loan Program into Direct Loan program will be able to gain access to different kinds of military benefits and also the Public Service Loan Forgiveness.
There are also no penalties for paying off the loan amount much ahead of time. So, after consolidation, if your affordability rise, you can even make more large payments and try to pay off the debt ahead of time.
In case of the private student loans, you can consolidate them separately. These are consolidated through the simple debt consolidation process, where you are required to take out a new loan so as to roll over the other loans into this. The new loan is required to have low interest rate and also a longer loan term so that you are able to make small payments on that. This helps you in paying off the private student loans that you might have taken in order to finance your higher studies. This can help you in becoming debt free soon enough and that too easily.
Outsmart Your College Debt with Help of Student Loan Consolidation
Posted by College Spot in College Finance
Consolidating the student loans
If you as a borrower have mix of loans, you can consolidate the federal education loans separately with private ones.
In case of the federal student loans, both the students and the parents can consolidate the education loans. There are actually various options through which you can consolidate the federal student loans. But, the married students cannot consolidate the federal loans together. The students are allowed to opt for debt consolidation after the degree gets over or after the deferment period ends.
Actually what happens in consolidation is that all the federal student loans and parent loans gets rolled over as one big loan with lowered interest rate. From 2010 (June 1), however, all the new federal consolidation loans will come from the Direct Loan Program. This means that the FFELP or the Federal Family Education Loan Program will go on to become Direct Loans. However, if you have both FFELP and DL loans, you can consolidate these together.
In order to consolidate the federal loans, it is important for you to have at least one federal student loan. But, there is no minimum balance required by the US Department of Education for you to consolidate the loans, the loan will have new payment term. After the consolidation, the repayment schedule will be reset to standard repayment. The borrowers who opt to consolidate the Federal Family Education Loan Program into Direct Loan program will be able to gain access to different kinds of military benefits and also the Public Service Loan Forgiveness.
There are also no penalties for paying off the loan amount much ahead of time. So, after consolidation, if your affordability rise, you can even make more large payments and try to pay off the debt ahead of time.
In case of the private student loans, you can consolidate them separately. These are consolidated through the simple debt consolidation process, where you are required to take out a new loan so as to roll over the other loans into this. The new loan is required to have low interest rate and also a longer loan term so that you are able to make small payments on that. This helps you in paying off the private student loans that you might have taken in order to finance your higher studies. This can help you in becoming debt free soon enough and that too easily.