Why should you consolidate student loans? The answer is simple – you lower your monthly payments to fit your budget, make repayment much easier and save money on lower interest rates.

Whether you have federal, private, graduate student loans or parent PLUS loans, you should consolidate those loans so you can manage your monthly finances.

As you start your new life and new career, you need your money for rent, new furniture and maybe a new car. You could be considering buying a home, getting married or starting a family. Whatever the case may be, this is the time when you need your money the most.

With the average post-secondary student graduating with over $20,000 in loans (Stafford and Perkins loans), you can see why it’s important to consolidate student loans and make them financially manageable.

When you consolidate debt, you lump your existing student loans into one large loan. By doing this, your monthly payment on the consolidation loan is much less than the total monthly payments of all your existing loans. And that provides you with the much needed money to get your life started the way you want.

I think you’ll agree that it’s much easier dealing with one lender and one due date instead of multiple lenders with multiple due dates. By consolidating your student loans into one, you get to manage one loan with one lender so you don’t have to juggle due dates and payments. The risk is missing or forgetting a payment is greatly reduced.

Student loan consolidation gives you the opportunity to get a lower interest rate. Many lenders are interested in your business and the interest rates you receive can be very competitive.

Federal student loans need to be consolidated on their own, separate from private student loans. They receive beneficial conditions and rates already, which can be lost if they are lumped with private student loans.

When you consolidate student loans, the consolidation loan pays off the existing student loans. By doing this, you essentially have paid off several loans at one time. This gets recorded on your credit report as successfully paying off loans. And that improves your credit score.

How does that affect you? If you’re looking to buy a car or get a mortgage, a better credit score means lower interest rates for you. That can save you thousands of dollars over the life of a loan or mortgage.

When you consolidate student loans, you can lower your monthly payments and get a lower interest rate. Dealing with one lender saves you from juggling multiple loans with multiple due dates. You also get the added bonus of improving your credit score. All of this adds up to saving you money and making your student loan more manageable.



By: Thomas Erikson

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A direct student loan consolidation may be an excellent choice for you and your situation. Ask yourself a few questions, gather all your statements and consider the fact that this may be a new beginning to getting your student loans paid off. Many students may put off consolidating their student loans; however they may find out that it is very simple and can put extra money in their pockets.

What Is Right for You?

Ask yourself the follow questions and then you can decide if a direct student loan consolidation is right for you. Are you having trouble with your monthly payments? Are you finding yourself in a default status or want to avoid one? These are important questions to ask yourself and be honest because honesty is the only way that you will know if a direct student loan consolidation is right for you. If your monthly payments are driving you crazy, then this may be an excellent opportunity for you to apply for a direct student loan consolidation.

What are your current interest rates? This is probably the most important question to ask yourself, because when you have a direct student loan consolidation the rate is fixed for the entire life of the loan. The rate is not to exceed 8.25%. That may be the deciding factor for you and you current situation.

Are You Eligible?

To be eligible for a direct student loan consolidation you must have one or more direct or Federal Family Education Loan Program loans that are in grace, repayment, deferment or default status. If you have a loan that is in an in-school status then it cannot be included in a direct student consolidation Loan. Take a close look at your situation and then you can decide the best path to take. Don’t be swayed by the unbelievable promotional offers flooding your mail box.

It may be possible that even if you do not have a direct loan you can still consolidate. If they include at least one federal family education loan and you have been unable to get a federal consolidation loan with payment terms that work for them. Each situation is different, that is why you must take a close look at all your options and do your research. Only then you will know if a direct student loan consolidation is right for you.



By: John Mailer

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Consolidate graduate student loans and lower your monthly payments, lower your interest rate and simplify the process by having only one loan.

For graduate students, consolidating your student loans becomes even more important than for undergraduate students. Because you generally carry significantly higher debt from being in school longer, making it more manageable when it comes time to repay is essential.

Based on the National Postsecondary Student Aid Study, graduate students average between $27,000 and $114,000 additional debt on top of their undergraduate debt. Here are 4 benefits that consolidating your graduate student loans provides.

The single most important benefit when you have a large debt is lowering your monthly payments so it is more manageable. When you consolidate graduate student loans, you replace your multiple student loans with one large consolidation loan. The total amount you pay each month with the consolidation loan is significantly less than the total amount paid each month on the multiple loans. This can be done by extending your consolidation loan period up to 30 years.

By consolidating your loans, you simplify the whole process. It’s much easier to keep track of one loan instead of multiple loans with multiple lenders and due dates. Also, the amount of paperwork and other hassles are greatly reduced.

It should be noted that if you have both federal and private student loans, you will want to consolidate these separately. Federal student loans (graduate or not) receive special benefits and conditions which are lost if consolidated with private student loans. So if you have both, you will want to have one consolidation loan for federal student loans and one for private.

The process of consolidating your graduate student loans provides the opportunity to receive lower interest rates. This helps offset the cost of extending your loan period in order to receive lower monthly payments. The lower interest rates on larger loans can help you save a great deal over the life of the loan.

When you consolidate graduate student loans, you essentially pay off your existing student loans with your consolidation loan. By paying off loans on time or early, you improve your credit score.

This can benefit you in the future by providing better rates on your car loan or mortgage. For a mortgage, even a small improvement in interest rate could translate into thousands if not tens of thousands of dollars in savings.

If you want to lower your monthly payments to a more manageable level, deal with only one lender, get a lower interest rate and help your credit score, you should consolidate graduate student loans. Make your student loans fit your financial situation – it’s the smart choice.



By: Thomas Erikson

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Here are 4 student loan consolidation repayment plans that are available to you for your federal direct student loans.

Consolidating your student loans lowers your monthly payments so they fit your budget. You can choose the option from these 4 that best suits your situation so that your student loan repayment doesn’t become a serious financial burden.

The equal payment option allows you to consolidate your federal direct student loans using equal monthly payments. You receive a fixed interest rate on your loan and then make equal payments until your loan is paid off. The main benefit to you is this is the least expensive option since you pay both interest and principal. The consistency of this option helps – you know how much you pay each month and it won’t change.

If you anticipate needing lower monthly payments for the first couple of years, then a graduated repayment plan may be right for you. You begin by paying lower monthly payments (usually interest only). After a specified period of time (usually 2 to 5 years), your monthly payments are increased to include both interest and principal.

This option is more expensive than the equal payment method because the initial period only covers interest so it takes longer for you to pay off the principal. As a result, you get charged interest for a longer period of time.

If you have an equal payment or graduated repayment plan, you can extend your repayment to 15 years if you qualify. In order to qualify, you need to have an FFEL loan that was disbursed on or after October 7, 1998 and the total amount of FFEL debt you have must be greater than $30,000. By extending your loan repayment, you lower your monthly payments so they can better fit your financial situation.

You need to keep in mind that by extending your repayment, it becomes a more expensive option since you get charged interest for a longer period of time.

If your financial situation just can’t handle the repayment requirements of these options, then another of the student loan consolidation repayment plans is called income sensitive repayment. Your monthly payments are adjusted each year based on your gross annual income. It takes into account your total debts and the size of your family. Your lender requires documentation about your income and debts in order to properly assess your monthly payment level.

No matter what your financial situation is, there is an option for you. These 4 student loan consolidation repayment plans provide you with a wide range of options so you can repay your student loans and have those monthly payments fit your budget.



By: Thomas Erikson

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Federal student loan consolidation is a free federal program that allows anyone with outstanding federal student loan debt to combine their loans, extend their repayment term, and lock in their interest rate. The terms and conditions on all federal student loan consolidations are set by the U.S. Department of Education, meaning that all federal student loan consolidations are, at least initially, created equal. There are no prepayment penalties or fees, and every lender has to offer the same federal forbearance and deferment options and the same initial consolidated interest rate. This rate is based on a weighted average of the interest rates of all the outstanding student loans rounded to the nearest 1/8th percent.

So, if every lender is offering the same federal terms and conditions, and every consolidated loan will have the same initial rate, what’s the difference between consolidation lenders? The difference between lenders is in the borrower benefits that are offered. These differences can be pretty substantial, and by asking the right questions, smart borrowers can get the best deal on their federal student consolidation loan.

Interest Rate Reductions

The most common benefit offered on a federal student loan consolidation is an interest rate reduction. This benefit is usually offered in two parts: a .25% reduction for auto debit and a 1% interest rate reduction after 36 months of on-time payments. This is a great benefit that can greatly reduce the total amount of interest paid on the consolidated loan. On a $30,000 loan, this benefit alone can save a borrower over $6,500 in interest! Although this is an attractive benefit, there are a couple things to ask your consolidation lender before proceeding with the loan:

1. Ask the lender if the benefit will lock in after you’ve made 36 months of on-time payments. This means that, after the 1% interest rate reduction is awarded, the benefit can never be taken away, even if payments are made late in the future. Most consolidation companies will add the 1% back in if any payment is late after the benefit has already been awarded. Many people don’t worry about this, assuming that they will always make their payment on time. However, most consolidation loans will take over 10 years to pay back and the odds are a payment will be late eventually. Clarify with the lender when a payment is considered late. Any reputable company should provide at least a 10-day grace period before a payment is considered late. Remember, just because you have your payments set up to be auto-debited from a bank account doesn’t mean they will always be on time. If there are insufficient funds in the bank account, the payment can be rejected and considered late.

2. Ask the lender if the on-time payments have to be consecutive to receive the interest rate reduction. Many companies will take away the benefit if you put the loan into a forbearance or deferment. This can even include a deferment on payments if you decide to go back to school. Reputable lenders will not take away your benefit for exercising your federal right to put your consolidation loan into a deferment or forbearance.

3. Ask the lender what will happen to the benefit if the loan is sold. Regardless of what a lender tells you, many consolidation loans are sold. Make sure that if your loan is sold, you will not lose your rate reductions. There are horror stories of borrowers making 30 on-time payments to find out that their consolidated loan had been sold to a new lender who will not honor the 1% rate reduction they were initially promised.

Cash Back Rebate

A relatively new benefit being touted by consolidation companies is the cash back rebate. This is usually a percentage of the principal loan balance that is either applied to the outstanding loan or sent to the borrower as a cash payment. This can be a very attractive offer, especially when in the form of a cash payment to the borrower.

It’s hard to resist a check for thousands of dollars, but when compared to the savings from the interest rate reductions, the cash back rebate is usually not the best financial discount.

For example:

One lender is offering a 1.25% rate reduction for on-time payments, and the other lender is offering a 3% cash back rebate on a $60,000 consolidated loan. The lender offering the cash back rebate will mail the borrower a check for $1,800 after they make 10 payments on time. The other lender will give the 1% rate reduction after 3 years of on-time payments. The cash rebate sounds tempting, but when you realize that the 1.25% rate reduction could save over $32,000, it is clear the interest rate reduction is the superior benefit.

1. If you decide to go with a company offering the cash rebate option, make sure to read the fine print. Many companies require that a rebate form be submitted by a certain deadline to process the cash back benefit. If the cash back rebate form is not received, they will disqualify the borrower from the rebate.

2. Ask the lender what exactly is required to receive the cash back rebate before submitting a signed consolidation loan application. Many companies combine the cash back rebate with other borrower obligations. One company requires that a borrower enroll in their electronic newsletter with a valid email address before the rebate is awarded.

The federal student loan consolidation program is an excellent way to manage student loan debt as well as save thousands of dollars in interest payments. By asking the right questions and knowing what to look for, you can maximize your savings and make sure that you get the best deal possible on your consolidation loan.



By: Joe Elias

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The Free Application for Federal Student Aid (FAFSA) is used in determining eligibility for all federal grants, loans, work study programs, and other methods of financial aid. You can find and download the application online at http://www.fafsa.ed.gov. You can also get a copy of the application from the financial aid office of the university or college you are hoping to attend, or your high school guidance counselor’s office. It is recommended that you apply online as any problems or inconsistencies should be noticed and (hopefully) resolved immediately, rather than waiting for days and sometimes weeks for the problems to be handled through regular mail services.

You will need to fill out a second application in order to apply for a student loan. That application is generally available through the financial aid office of the university the student will be attending. There are two types of student loans, subsidized and unsubsidized. A subsidized student loan is based on financial need. An unsubsidized student loan is not need based and interest begins to accrue immediately.

Once you’ve been awarded a federal loan, you must attend an entrance counseling session that lasts about 30 minutes. Session includes information on budgeting for repayment and the borrower’s responsibility to repay the loan. This is required and the money will not be credited to your student account until you have completed the entrance counseling.

You must also complete exit counseling before graduating or leaving school. The exit interview is meant to remind you of your obligation to repay the loan in addition to setting up your repayment schedule, along with the proper way to obtain a deferment should that become necessary.

Important things to keep in mind:

1) Most schools have priority deadlines for applying and receiving the maximum possible award. Make sure that you have all papers filed and in order prior to the deadline for application.

2) Applying online is the preferred method for applications because any mistakes should show up immediately. When you apply online you have access to various tools, such as spell check, and other online resources.

3) File your taxes early in order to complete your application early. The earlier you complete all of the necessary paperwork the better your options of getting the maximum award available to you.

4) Respond to all requests for further information immediately. Failure to do so will prevent the school from moving forward in the process of awarding financial aid.

5) Keep copies of every piece of correspondence and every necessary record.

6) Make sure that all paperwork is not only filled out accurately, but completely as well. Incomplete applications cause unnecessary delays.

The university is also a great resource for information and guidance in the application process. Make an appointment with a financial aid counselor at the university or college. Be sure to bring all relative paperwork (financial documents, tax returns, etc.) to the interview with you. If you’re still in high school, your guidance counselor can also help you with the necessary paperwork. Take your time filling out the application and make sure you attach all of the requested material.



By: Gray Rollins

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Nowadays, the cost of higher education is getting more and more expensive. Some families may not be able to afford to send their son or daughter for further education. Getting a student loan will help.

There are 2 broad categories of student loans available. Government student loans and private student loans

Government or federal student loans are funded and administered by the US Department Of Education. It is classified under Federal Student Loans Aid Program. They have very few requirements other than you are studying in a US college or university. International students may also apply though approval is on a case by case basis.

Every year, the student loan aid program disburse nearly 60 billion dollars so it is a good choice for get a student loan from the government. Thus the interest rates are pretty low.

Private student loans are funded and administered by banks and other financial institutions. These lenders provide student loans at a higher interest rate compared to federal student loans. Some common student loans available are from Citibank and Sallie Mae

You are allowed to apply for both private and federal student loans for your education needs although I would not recommend it.

For some students who have a few student loans to repay concurrently, it can be a financial drain on their family finances. That is where student loan consolidation comes in.

Student loan consolidation basically consolidates all your student loans into one loan so that it is easier to manage and make payments. When you are getting a student loan consolidation whether from the government or the private market, your existing student loans are paid for and erased by the student loan consolidation lender. The balances are transferred to the new student loan consolidation. Thus you start a new loan and only needs to make a single payment each month.

There are many advantages to using student loan consolidation. The interest rates will be lower since it takes the average interest rates of your previous student loans. Thus due to government legislation, the maximum interest rate cannot be higher than 8.25 percent.

It becomes a lot easier to manage a single student loan and payment are easier. The repayment options are quite flexible. For federal student loan consolidation, you can opt to start repaying after you have graduated from school. There are also several other options.

Another beneficial side-effect of student loan consolidation is that it can also improves your credit score. Since you are effectively clearing all your old student loans and taking a new one, your credit score will increase and is important if plan to take other types of loans in the future.



By: Ricky Lim

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Have you decided its time to look into your graduate student loan options? You will be happy to know that there are plenty of options to choose from. Graduate student loans are a big investment for any student, however many lenders help students achieve their higher education goals by offering different terms and rates.

Federal Loan Options

Federal student loans can be given to students who need a graduate student loan. There is Stafford loans and Graduate PLUS loans for professional and graduate students. These are excellent options, and the least expensive options for student to borrow money for their graduate student loan needs. All students should first exhaust Stafford loan options, and then apply for and consider a graduate PLUS loan to help you meet the financial needs of going to graduate school.

Another option that may appeal to you and fit your specific situation is a private student loan. This is an option for you to get a graduate student loan without taking the path to applying for a Stafford loan, or Graduate PLUS loan. This may also be an option to help you meet the needs not meet by a Stafford or Graduate PLUS loan, or any other loan.

Private Lenders

To help you obtain a graduate student loan there are many private lenders with several excellent programs that are worth you looking into. Do not be discouraged by the stress and time it takes to research your options. A graduate student loan is needed to fund your higher education needs so this makes all the research worthwhile. Look for a loan with low fees and competitive interest rates. Also look for specific options for repayment that meet you financial needs before and after your graduation.

The key is to look at the long term because as you know financing your education is very expensive. The long term effects of your graduate student loan may be difficult to swallow; however the education you will receive is priceless. Research is thus the key to getting the best graduate student loan.

Your graduate student loan options can also be changed and doors or opportunity may open for you depending on what type of school you are going to. If you are going to school for a certain education such as business, law or medicine, you may want to research what private lenders offer these students to help them obtain a graduate student loan.



By: John Mailer

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At some point in life, it is almost guaranteed that you will be applying for a loan of some sort. Paying cash for products and services is not only becoming obsolete, it’s terribly inconvenient. Today, credit is a way of life, and as more and more people begin to shop online, plastic is the currency accepted everywhere.

The most basic of loans is of course, the credit card. Companies that issue credit cards make money every month that you carry a balance, and they are betting on the fact that you won’t pay off the balance every month.

Some loans actually make good business sense. Why would anyone want to shell out $300,000 for a new home when they could get a Home Loan and pay $1,000.00 a month, and then deduct the interest paid from their income taxes? That three hundred grand could be put to work in other investments, and could conceivably earn more for you than you are actually paying for the house! And all that time, if you time it right, your house becomes more and more valuable.

There are also times when for many people things just aren’t going well financially. An unexpected expense occurs and you find yourself just coming up short on your living expenses. Many types of loans exist for this type of situation, both secured and unsecured.

Maybe you just need some quick cash to get through the holidays, and intend to pay the loan off within the next few pay periods. Companies offering short term Payday Loans abound both on the Internet and off. Some with no credit check will transfer up to $1,500 into your bank account within 24 hours.

Student loans, auto loans, small business loans, personal loans, home loans, second mortgages, payday loans, government loans, bad credit loans, loans to consolidate other loans - there is a loan for just about any occasion out there.

The question is how much are you going to pay for your loan? And the answer to that depends in most cases on your credit history.

Your Credit History: Weather or not you get the loan, and how much it will cost you.

It is never too early to start establishing credit, and the best way to do this is with a credit card. If you are finding it difficult to obtain a credit card because you have no history, you can always buy your history by applying for a secured credit card or line of credit. Put down $500 or $1,000 and borrow against it. Make sure the institution you are applying to reports to the major credit bureaus, use the line of credit and pay your bills on time, and voila - you have a credit history! There is nothing wrong with carrying a balance over, just pay the minimum or a bit more, and pay it on time! Creditors like to think they will be making some money off of you.

What Lenders are Looking For

While different institutions have different criteria, there are some generalizations one can make about how they determine the creditworthiness of an applicant. Make no mistake about it; creditors are in the business of making money. If your credit is less than perfect, it doesn’t necessarily mean you won’t get the loan, but you will be paying more for it!

After receiving your application, a lender will then acquire a credit report from one of the three major credit bureaus, Equifax, Trans Union, or Experian. This is your credit history. Taking into account such factors as your income, the balances in your checking and savings accounts, the assets you own, the length of time you have been at your current job and place of residence, the amount you owe other creditors, and how promptly you pay your bills, the potential lender will then make a determination on if you will get the loan, and how much they will charge you for it.

Frequent late payments, bankruptcy, repossessions, legal judgment liens, or accounts being turned over to collection agencies do not bode well for obtaining a loan. That being said, most creditors realize that life happens, and such legitimate circumstances like an unexpected illness, injury, or the loss of your job do not necessarily reflect negatively on your creditworthiness.

When Things Take a Turn for the Worse

If you are in the process of paying on a loan or loans and one of these unforeseen circumstances befall you, talk to your loan officer. Most loan institutions find it in their best interest to work with the lendee, and will often make the necessary arrangements to make it easier for you to make your payments. Just remember, they want their money, and the last thing they want is for you to default on your loan, or heaven forbid, declare bankruptcy!



By: Michael Talbert

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While taking a loan for meeting high cost of collage studies, a student has to go through lots of formalities as these loans involve governmental proceedings. Many other hurdles may come up for a student. This is because students are new to loans and do not know nuances and aspects of loans. However there are number of student loan services providers these days that can make student loan availing fairly easy. It is not just loan availing, but student loan services also include all crucial aspects of the loan also. A student can locate these services on internet.

Main focus of Student Loan Services is to make loan availing and its repayment a burden less affair for students. So, these services are vital for any student. These services first of all collect all necessary details about the student and his or her requirements so the student takes a suitable loan. The services providers are also responsible for processing the loan application for students.

Once the loan has been availed these service providers keep an eye on the loan repayment. Students can repay installments online though student loan services. What is more, in case a student later finds student loan repayment a little difficult then these services help the student come out of the trouble. For instance, they can advise a student in taking a consolidation loan beneficially.

Student loan services are also source of student loans and student loan consolidation. These services offer full loan packages to all type of students for enabling to meet their educational requirements. Student can get all loan information on various types of student loans from these services like details on Federal Stafford Loans, collage student loans, graduate Stafford loans, PLUS loans, private student loans and so on.

While searching for a suitable student loan service ensure comparing their types of services and the experience the company has in providing it. Surely these are useful loan services for the students.



By: Julia Russell

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