Student Loan Consolidation
Student Loan Consolidation
Student Loan Consolidation allows you to combine several existing student or parent loans into one new loan from a single lender, using this new loan lender to pay off the balances on the other loans received from financial institutions or from the federal government. You must then repay to one single lender instead of making different repayments and amounts to various lenders. The student loans eligible for consolidation must be either in grace period (six months after finishing your studies) or repayment, and the minimum amount of money for consolidation is USD 5000.
Student Loan Basics
This post is primarily about the basics about student loans. I really wanted to show off all sides with regards to this. Here, it’s sources are tackled thoroughly tackled for students to have more information in order to cater their needs and answer the questions that lingers in their mind which starts with where, how, when and what. The following is from a reliable source which I intend to get for people.
There are two sources for student loans — the federal government and private lenders. In order to obtain most federal student loans, you will first need to file the Free Application for Federal Student Aid (FAFSA). In most instances the FAFSA is required for all federal financial aid including federal student loans. There are four main federal loan programs:
*You can learn the ins and outs of each at their respective pages on this site. The Federal Stafford loan is made in the name of the student, is based on need (only the subsidized portion), does not require a credit check (it’s guaranteed by a private guarantor and backed by the government rather than credit/income/assets, etc.) and does not have to be repaid until after the student graduates, leaves school or stops attending on at least a half-time basis. Some schools offer Stafford loan directly through the federal government. These are commonly known as Direct Stafford Loans. The schools that offer Direct Loans are known as Direct Lending Schools. Other schools offer Stafford loans through banks or other lenders. These schools are commonly called FFEL schools (Federal Family Education Loan). In order to obtain a federal Stafford loan through a FFEL school, you will need to choose a lender.
*Federal PLUS loans are made in the name of a parent. While they do require a credit check, the credit criteria to obtain a PLUS are generally not as stringent as they are for other types of consumer loans since they are based on Federal requirements. Repayment of a PLUS loan begins after the loan is fully disbursed. PLUS loans disbursed on or after 7/1/2008 may have payments postponed while the student is in school at least half-time, however interest is still accruing. Be sure to read your loan disclosure and contact your lender if you would like to postpone the payment on your PLUS loan. Again, some schools offer PLUS through the federal government and others offer it through banks or other lenders.
*The Federal Graduate PLUS is just like the PLUS for parents except that it is made in the name of a graduate or professional student. However, the student must apply for the maximum annual limit of the Stafford Loan before applying for the Graduate PLUS. It is important to remember that the Federal Graduate PLUS requires payment within 60 days after the loan is fully disbursed. Deferment options are available while you are still attending school at least half-time. Check with your financial aid office. (Note: Servicers usually will automatically place Grad PLUS loans in deferment).
*Federal loan consolidation is for student borrowers who are in repayment status or parent borrowers who wish to extend the repayment period on their current PLUS loans and obtain a fixed interest rate for those loans which might have a variable interest rate. You can combine all of your eligible federal student loans into one loan with a Federal Consolidation Loan. Consolidating also locks the interest rate you pay on your loan. In addition, by consolidating you can possibly lower your payments by extending the length of the repayment period for your loan. However, with the extended term, you will end up paying more in interest over the life of the loan.
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