Student Loan Consolidation Guide

Hiding from Loans is Impossible

Posted on 2 January 2009 | 1 response

There is one particular truth when it comes to student loans – you can’t hide from them. It may sound extreme though, but school loans are completely immune to bankruptcy and those students or graduates that failed to pay their bills face stiff punishments.

The usual consequences are poor credit ratings, garnishment of wages, and IRS penalties. Besides, attaining licenses in certain fields is impossible when you failed to pay off your student loan debts.

There is even a chance that you may be excluded from some government contracts if you own a small business. With all these consequences, it is then clear that avoiding a student loan is no way to start a life after college. Read more

Is federal student loan consolidation the best option?

Posted on 26 May 2010 | No responses

To help students finance their college expenses, the federal government has introduced so many plans. You may find the programs of some lending companies more attractive with respect to their easier process, and apparently respectful dealing, but the implied benefits you are going to give them, and they are going to have from you, are not so easy to be clear. On the other hand, the federal student loans, though with less respectful and boring processing, are always based on easier terms of repayments, and lower interest rates. Above all, the federal student loans mostly do not require a strong credit history, and are comparatively more flexible with respect to the postponement facility you can have in making payments.

With all this history of easily given student loans, Federal student loan consolidation stand out as the best option to consolidate multiple loans into a single loan. The consolidation of federal student loans into one loan is mostly available in different federal student loan consolidation programs, that the federal government introduces every now and then, and that it does with slightly changed interest rates and narrowly different repayment terms.

Federal loan consolidation, or the program that offers federal student loan consolidation, is mostly aimed to consolidate and combine all existing federal student loans. Consolidation of federal loans, or combining of all your federal students loans in a single loan is a kind of refinancing that offers you more peace of mind. Instead of short term repayments, larger interest rates and varying conditions, you have to determine a single repayment amount, with fixed interest rates, and a duration of time from 10 to 30 years mostly.

The chief benefits that make federal student loans consolidation an attraction for the student loans borrowers, is its ability to reduce the over all interest rate by 0.6%. Plus, you do not have to submit any credit checks, fees or application charges.

However, to get these benefits, you have to consolidate your student loans, or all your federal student loans within your grace period.

Are you eligible for student loans consolidation?

Posted on 25 May 2010 | No responses

Consolidating your multiple loans into one loan is so far the only available solution to decrease, lower and minimize your burden of more than one loans. However, unlike what most of the people think, a person in certain cases may not be considered eligible for consolidation loans.

To know that a person is eligible for consolidation loans or not, he or she should be able to give the answers of few questions quite positively. All the persons who wish to consolidate federal direct students loans should know:

1. Are they students in these days? And, if they are students, are they the students of an institution that deals in direct loans?
2. Do they have currently at least one direct loan? And, if yes, do they have that direct loan, or FFEL in their in-school times?
3. In case, they are currently not attending any federal direct loan institution, do they have at least one direct loan? Or, can they have, or can they include, their direct loan or FFEL in their in-school times?

If the answer of all these questions, or parts of questions, is positive, and they accept that they know and mean these questions in positive, they are very much likely eligible for consolidating their federal direct students loans.

In case, they are not students in these days, they should be able, nevertheless, to include at least one direct loan in their loan consolidation. If they are not able to include that direct loan, they should be able to include at least one FFEL. In that case even, you need to be unable to take a federal consolidation loan with a lender who has been dealing in  FFEL consolidation. Above all, you can not get federal consolidation loan with repayment terms though acceptable yet quite income sensitive.

So, before going to consolidate your loans, you should have quite a deep analysis of your background, academic career, and the lender positions.

What types of students loans can you consolidate and what not?

Posted on 25 May 2010 | No responses

Consolidation of multiple loans into one loan, though an only feasible option available in these days, and that is undergone and availed by most of the people in your surrounding, seems needing explanation when we see that most of the people even do not know what types of loans are legible for consolidation and what not. Most of the people think that loan consolidation is applied to all their loans, and they can perhaps consolidate all types of loans whatever they have. In fact, this is not true. You can not consolidate all types of loans, and therefore you may be left with some loans that are beyond all consolidation facilities.

In the following lines, you will see all those loans specified in one group, that are liable to be consolidated, and that you can consolidate at most of the lenders:

1. Direct PLUS loans and federal PLUS loans
2. Direct consolidation loans and federal consolidation loans
3. Federal insured student loans
4. Auxiliary loans to assist students
5. National direct student loans
6. Direct subsidized and unsubsidized loans
7. Guaranteed student loans (GSL)
8. Federal Perkins Loans
9. Federal subsidized and unsubsidized Federal Stafford Loans

So, you can see that this is not primarily the consolidation of loans, but the consolidation of students’ loans. You have seen that you cannot consolidate all your loans. There are only nine types of loans, and in certain cases a few more, that you can consolidate. You cannot consolidate any loan that the federal government has not declared as guaranteed. In the same way you cannot consolidate Medical Assist Loans, Primary Care Loans, Law Access Loans, PLATO Loans etc. Of course, these are not all the loans that you cannot consolidate. These are a few of those you cannot consolidate. You may see some others as well.

In short, while taking loans, and while going for consolidating them, you should make it quite clear in your mind that what types of loans you can consolidate and what not.

Who can consolidate your loans?

Posted on 25 May 2010 | No responses

The loan consolidation with all its perils and dangers is, however, the only available situation that can help you get rid of multiple loans. In the beginning when you started taking loans, you did not know that you may have to consolidate them some day. So, you started taking loans from anywhere you thought acceptable. Now, when you have taken more than one loans, and you are feeling tired to going through all that multiple types of terms, bills, offices, and you are suggested that to give you a little relief from all this headache, you should consolidate your loans, and instead of being worried about so many lenders, should be worried about only one lender, only one bill, only one office, you are thinking about consolidating your loans into one bigger loan.

But, in certain cases you may find that the matter is not so simple. When you have visited your lender to consolidate all your loans into one loan, you have found that your lender is not the type of one who does so. Where to go now? Who can consolidate your loans? In this situation when you have just found out that all the lenders do not offer consolidation services, and the government regulations have taught you to consolidate your loans from the same lender who has previously given you the multiple loans, you are forced to look for other lenders. Do not commit any further mistake. This looking for another lender should be taken very carefully. The place where you should start looking for first, is your school’s financial office. You may not find any other resource more available, more acceptable, more understandable, than your school’s financial office.

In other words, if you are the one who has not gone through all this situation, you should keep in mind that while going for taking loans, you are not to see only the interest rates, repayment terms etc, you are also to see if the lender provides loans consolidation services or not.

Be careful in consolidating your loans as a married couple

Posted on 25 May 2010 | No responses

If you are married and you are going to consolidate your loans as a couple, or you are going for loan consolidation as a joint borrower, take care of your decision more than ever. Sometimes, the lenders suggest that the joint borrowing shall give more benefits, do not forget that they are doing this for their own assurance and guarantees. The ease and facility of lender should never tempt you to take loans.

If, however, you are going to co-sign the documents of taking loans, or consolidating loans, you should keep in mind that you both are liable to payback the loans, even when you are divorced. If your partner gets astray or lead you betray, and start living with some one else, separate from you, and you do not know about him or her, the lenders will consider you responsible of all loans you have co-signed and taken together.

Most of the time the students loans are forgiven if the borrower is dead for some reasons, but if you have taken loans, or consolidated the previous ones, as married couple, you both are responsible of paying all the loans. If your partner unfortunately dies before the completion of terms, you shall be held responsible of repayments of his or her loans. If, however, both of you die, the loan is forgiven, and no one is considered responsible for.

So, the consolidation of loans as married couple, or as joint borrower, should not be opted without giving a second consideration. The possibility of divorce and cheating is too high in joint borrowing.

The best thing you can do in this case is to keep you updated all the times. The lenders may come with varied terms and conditions, and you may see no harm in signing an easy way to a healthy loan. But, do not forget that you are signing a possibility of getting too much under stress if your partner comes out as professional cheater.

The cares that you ought to take before applying for loan consolidation or simply loan

Posted on 25 May 2010 | No responses

The process of repayments of loans can not be easier, if while applying for loans, you have not taken all careful measures. The decision for applying for loans, should never be made hastily, should never be made at the insisting of your friends, and should never be made to fulfill your non-academic needs.

However, when you have decided to take loans, think what month of the year is going. If it is May or June, you should wait for the 1st of July. Leaving aside the case of dire circumstance, the decision of taking or consolidating loans is beneficial for you if made after 1st July. The interest rates are mostly revised at the end of June, and you will have to pay the interest of the previous economic year, even though the new rates are changed and fallen too down, if you have taken the decision of having loan, and your application is got approved, before June 30, though only few days before. So if the circumstances are not so pressing, try to wait for the 1st of July, so that new interest rates should be announced, and the decision of taking loans, or consolidating them, should be proved more viable.

Sometimes, the lender take too much time to confirm you application for loans, and when they confirm it, the end of June is already at the start. So the decision made in June are mostly proved as lotteries or casinos. You may lose or win, there are equal chances. It is however strongly recommended that the decisions of taking loans should be made on solid ground, and should not be made as lotteries or casino decisions. So, if you make a decision to take loans, or to consolidate them in June, or before 30th of June, you will have to pay the interest rates of the previous year. It does not matter the interest rates in the coming year after July 1, are fallen down, or mounted up high.

Before signing for loan consolidation, consulting an authorised adivsory is advantageous

Posted on 23 May 2010 | No responses

Before signing for loan consolidation, it is proved advantageous to consult some authorized advisory. They will not only make you better understand the terms and condition but also suggest the sound ways to debt management and loan repayments strategies. Having consulted them, you will be better able to understand why are you going to consolidate your loans, and what benefits are you likely to get.

Try to understand if the total amount of loan is repaid with comparatively equal interest. Try to understand if the time span, having consolidated all the loans, remain the same. And above all, try to understand if there are any origination fees, if there are prepayment penalties, and that if there are increased interest rates.

If every thing goes well, try to understand if the company is going to change its terms and conditions before you have finished the repayments of your loan. Share you understanding of the document with some one closer to you, and see what others do understand. If there is any ambiguity or plurality of meaning, make it clear right away.

Do pay heed to some debt management or loan repayment strategies. The most common strategy is an effort to increase your income, and cut short your expenditures. Try to ask you again and again if you can do this all. Then try to make you understand that you are going to do this all at every cost.

If you have done this all, do attend some student loan consolidation programs and seminars. Pay heed to the suggestions made by others, and try to improvise your own ways to meet your situations as well.

Never, never, never forget that you have taken the loan to make your life better, not worse. If you see it is getting worse, analyze your situation and try to find where have you committed mistake. The sooner you will realize the situation and overcome it, the better you will be able to repay your loans, and get the full advantages you have dreamed.

What one should keep in mind while signing for loan consolidation

Posted on 23 May 2010 | No responses

While signing for loan consolidation, a person along with so many other things, should not forget that he or she is signing for consolidating their loans to make it a kind of easier repayments. Needless to say, if the consolidation of loans is becoming more difficult, more difficult than the actual loans, the signing is just a kind of foolishness.

Among hundred of other things, what one need to know at the top of every thing, while consolidating his or her loans, is first that the federal loans are not to be consolidated into a single loan. They will remain, and be considered separate from the private loans. This is simply because the issuance of federal loans is made at the different terms and conditions, and of the private loans at different.

Another thing one should likely know before signing for consolidating his or her loans, is that the consolidation of loans does not mean that his loans are repaid and that he is no more under any loan. He should be completely aware of the fact that the consolidation of loans means the change, or rather a positive change, in the installments, and the time limits required for these installments. In other words, if a person has to pay thirty percent of his or her income, and that he or she is going to pay this thirty percent for the coming nine years, to nearly seven lending companies, he will have to pay onward only ten percent of his or her income, and that too to only one company, but in, say, twenty seven years.

In any case one should not miss the underlined stresses on longer period of time, and vaster percentage of interest. While signing for consolidating his or her loans, one should completely go through the terms and conditions the company is offering at present, and the terms and conditions it has put under its control and says that it can change them whenever it feels necessary to do so.

The consolidation of loans is nevertheless the most suitable way of repayments

Posted on 23 May 2010 | No responses

The time and energies required to meet, say, eight companies, is after all a more tiresome involvement, than to meet a single company. Eight companies means eight bill, eight meetings, eight schedules, eight terms and conditions, eight…..so many eights. If you are under the debt of seventeen companies, or twenty nine, it is comparatively more difficult. You can imagine it right  away.

However, instead of all this if you have to think about only one company, one terms and conditions, one bills, and one …… only one, you will feel more in ease. But, what one should not forget any time, is that he has bought this ease, as he bought when he took these loans, at the cost of some money, some extra money, and some head ache. Above all, he should not forget that if he or she is going to run under debt with a company or group, it might prove equally humiliating, disgracing, tense, and pressurizing as to run under debt of a person who lives to your next door, or who is your old friend, or a near relative. To take loans from companies does not mean that you will not have to undergo all this hell of emotional, psychological and moral pains. Sometimes, in case of inability to repay your loans, you may have to go behind the bars.

However, if you know all this already, and say that your urgency to consolidate loans is indispensable, we shall simply ask you to go and consolidate your loans. If everything goes how you have calculated or imagined it, the consolidation of loans may prove less harmful, if not completely helpful. The consolidation of so many small loans in a bigger loan, is in fact the consolidation of small worries in a bigger worry, the consolidation of urgency in an ease, the consolidation of short spans in a bigger span of time, and above all the consolidation of so many humiliations in a single one.

The two-faced popularity of loan consolidation

Posted on 23 May 2010 | No responses

As the trend or incumbent urgency of taking loans, became a routine matter, there stared coming cases in which a student or the parents had to suffer a lot for not paying back what he or she had taken in student years. There came around such cases in which the students or their parents had to be involved in criminal or immoral activities for loan repayments. What was opted as a way to avoid evil days, actually caused them come hastily. Whether it was the case of federal loans, or private loans, both proved havoc for some students. In certain cases the parents suffered a lot more than the students.

The ultimate solution of all this problem was indispensable. Yet one can not suggest, and one should not accept this solution without giving a second thought. As we all know that a loan or borrowing should never be a choice, we should also know that the consolidation of loans should equally not be the only way to pay back debts. We should not forget that the consolidation of loans is just another loan. In certain cases the consolidation of loans become more painful than the actual loans.

Let us say a person had taken five private and three federal loans. However, in his job life, he was managing it quite well. He was about to get rid of all loans in the next three years, when he was suggested to consolidate his all loans in one bigger loan, and that with some six years of repayments, with comparatively easier installments, and he agreed. He was suggested only one point that instead of thinking about eight bills he would have to be worried about only one bill, and that is all. Now to save his worry about seven bills, he was caught in a bigger worry of thinking for three more years.

So the consolidation of loans is in no way a decrease in loans. Rather, it is a kind of increase.

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