Student Loan Consolidation

Are you looking for ways to ease your student loan debt? If so, you've come to the right place. Graduating from college and embarking on a new career is probably one of the most exciting periods in life. Regrettably, the same cannot be said of the burden of having to pay off those dreaded student loans once you've left the familiar surroundings of your college campus and set foot in the real world. Unless you have super rich parents, received a full scholarship, or happen to be one of those whiz kids who became millionaires by their late teens, chances are that a portion of your education was paid for using student loans. This means that shortly after you graduate you're going to have to start making payments to the various lenders you borrowed from. The problems that many Americans face, however, is that they struggle to pay off their debt in whole or in part and get caught up in a hopeless cycle of late payments and late fees. This is where student loan consolidation can help and we're going walk you through the entire process. 

So what exactly is student loan consolidation? In a nutshell, consolidating your student loans is a way to refinance your existing student loans and combine them into one new loan. The key benefit of this is that your interest rate and monthly payments can be significantly reduced. You could in fact end up saving thousands of dollars. Even if you feel that you can make your original student loan payments on time each month, it is still a good idea to consolidate them to lower your payments and free up money which you can then use to pay off debts with higher interest such as credit cards and personal loans. Consolidating student loans, however, is not a simple process. In order to truly benefit from it, you must do all your due diligence. You need to become knowledgeable of all pertinent facts and options available to you, research and find reputable companies that specialize in providing student loan consolidation services, and know what to look for when comparing companies and what services to expect once a company has consolidated your loans. Your financial situation can actually get a lot worse if you don't know what you are doing. We hope, however, that our guide will provide you with a strong foundation and point you to the resources needed to make this process go smoothly.

Student Loan Consolidation Frequently Asked Questions

Here is a collection of some frequently asked questions concerning consolidating student loans:

Q:  Is there a cost for consolidating student loans? 

A:  There are no fees for applying for or consolidating federal student loans. There may, however, be nominal fees for private student loan consolidation. Lenders may change you an up front application fee or a fee once your loan is consolidated.

Q:  Do I need good credit to consolidate my student loans?

A:  It depends on whether you are consolidating your loans through the federal government or through a private lender. The federal government does not look at your credit rating when making a decision but private lenders do. In fact, you may be eligible for federal student loan consolidation without any collateral, a co-signer, or having to go through credit checks. For private student loan consolidations, however, you and your co-signer will most likely have to go through a credit check and a good credit rating will go a long way. 

Q:  Do I need a co-signer to consolidate my student loans?

A:  Co-signers are not required for federal student loan consolidation. Private lenders, however, do often require undergraduates and new graduates to have a co-signer. If, however, you have a very strong credit rating this requirement may be waived.

Q:  Can federal and student loans be consolidated together?

A:  No, they cannot. You can consolidate them separately so you'd end up with two loans - one federal and one private.

Q:  Can you consolidate your loans while still in school?

A:  No, you cannot consolidate while you are still enrolled full-time. You can only apply to consolidate them once you've graduated or are enrolled less than half time.

Q:  What are the requirements for federal and private student loan consolidation?

A:  The eligibility criteria for consolidating federal student loans are outlined hereunder the "Federal Student Loan Consolidation" section. The requirements for private student loan consolidation are lender specific.

Q:  What types of federal student loans can be consolidated?

A:  You can consolidate most subsidized and unsubsidized federal loans such as your Stafford, Parent PLUS, HEAL/HPSL, Perkins, and all Federal FFELP and Federal Direct Loans.

Q:  How are the interest rates for consolidated federal and private student loans calculated?

A:  The interest you pay for consolidated federal student loans is a fixed rate equal to a weighted average of the interest rates on your existing loans at the time you apply for consolidation. The calculated rate is typically rounded up to the nearest 0.125%, and capped at 8.25%. Interest rates for consolidating private student loans are based on either the LIBOR or Prime index, plus a margin for borrower or cosigner credit.

Student Loan Consolidation Options

Following your graduation, you may find yourself with many types of student loan debt that you acquired along the way. The types of debt you have determine the consolidation options available to you. Some are obviously more beneficial than others which is why it is critical that you pay close attention to the types of debt you lock yourselves into during your education. The two primary consolidation options which we discuss below arefederal student loan consolidation which lets you consolidate most subsidized and unsubsidized federal loans (such as your Stafford, Parent PLUS, HEAL/HPSL, Perkins, and all Federal FFELP and Federal Direct Loans) and private student loan consolidation which allows you to refinance all non-federal, education related debt. We will also look at some other consolidation options such as income-based student loan repayment and service based debt mitigation. 

Federal Student Loan Consolidation

Federal student loan consolidation is a fixed-rate refinancing program that combines all your existing federal student loans into a new loan. Terms range from 10-30 years. The interest you pay is determined by a formula set by the federal government based on average of the loans you currently have and are applicable at the time you apply for consolidation. It also depends on the types of loans you have and when you took them out. The calculated rate is typically rounded up to the nearest 0.125%, and capped at 8.25%. You can calculate your potential consolidation rate using FinAid's Financial Calculator. 

We have already seen how student loan consolidation offers you the benefits of reduced monthly payments thanks to an extended payment term which frees up your money to pay help you pay your other bills or save some money each. However, federal student loan consolidation has some added benefits in that you are NOT required to be employed at the time you apply, undergo credit checks, have any collateral, or have a cosigner of any kind. Moreover, there are no penalties for overpayment so you can make bigger payments to reduce your repayment term when it is advantageous for you to do so. To qualify for federal student loan consolidation, you must meet the following criteria:

1. You must no longer be in school or be enrolled less than half time;
2. You must have at least one Direct Loan or Federal Family Education Loan that is currently in its grace period or actively being repaid; 
3. You must have a loan other than a single Direct Consolidation Loan (i.e. a Direct Consolidation loan cannot be the only loan to be involved in the process). If you do have a Direct Consolidation Loan, you cannot consolidate again unless you include an additional FFEL or Direct Loan. However, there are some circumstances where you may be able to apply for consolidation again if you have FFEL Consolidation Loan; and 
4. Defaulted education loans can be consolidated provided you've made repayment arrangements with your current lender or agree to pay your new Direct Consolidation Loan under the Income Based Retired Plan or the Income Contingent Retirement Plan. 

Follow the link below to begin the application process:

Federal Student Loan Application

One useful bit of advice we have for you is that you may want to consider consolidating during your grace period (i.e. in the months immediately following graduation where you are not required to immediately start making payments). This can let you lock in a lower consolidated interest rate but you do have to start making payments sooner. We also recommend that you do not consolidate your federal loans into private ones. Doing so will result in you losing certain benefits such as the ability to defer payments, qualify for forgiveness under certain federal programs, and/or apply for forbearance. Also, you should never have to pay a free to consolidate your federal loans. 

Private Student Loan Consolidation

Private student loan consolidation lets you consolidate all your private, non federal student loans into a new manageable loan. The main benefit of consolidating your private student loans is the ability to make a single payment each month. You typically won't end up paying any less, however. Your monthly payments may be reduced if you negotiate a longer term but you will then likely pay more in interest. If, however, your credit score has improved since the time you first took out your loans, you may be able to have you interest rates reduced. Your rate may also be reduced if you have a co-signer with very good credit.

Repayment terms are typically up to 25 years for undergraduate borrowers and 30 years for graduate borrowers. Other benefits of private student loan consolidation include a 48 month defer medical/dental residents and a 36 month deferment for all active-duty military personnel and, as with federal student loan consolidation, there are no penalties for early payments. (Excess payments go towards paying down the principal).

Interest rates for consolidating private student loans are based on either the LIBOR or Prime index, plus a margin for borrower or cosigner credit. Origination fees range between 0% and 8% depending upon the borrower or co-signer's credit. These fees are sometimes due at closing, which means the amount borrowed is increased but this avoids any out-of-pocket expense at closing time.

Other Student Loan Consolidation Options

Aside from federal and private student loan consolidation, there are some other consolidation alternatives that you may wish to consider. Firstly, income-based student loan consolidation is a viable alternative for those who are initially struggling with a low income following graduation but expect their income to increase substantially relatively soon. In income-based student loan consolidation, you essentially agree to pay your lender a fixed amount each month plus a certain percentage of your income (ranging from 2-5%). 

Some lesser known student loan consolidation alternatives involving community or private service can substantially reduce or eliminate your debts entirely. If you are a law student, for example, your school may agree to pay a certain amount towards the repayment of your loan each year if you agree to work pro bono (or for a low hourly wage) in certain public service fields following graduation. This may, for example, include providing legal consultation to the poor. Similar programs exist for teachers, doctors, and health care professionals. By agreeing to perform volunteer work and/or offering your services in low-income areas where there is a shortage of professionals in your field for a certain length of time, your debt can be wiped out or substantially reduced. You may also be able to work out a loan repayment agreement with your employer in your chosen field.

How to Get the Best Interest Rate when Consolidating Student Loans

Graduating from college is a major accomplishment that you should be very proud of. Earning your degree means that, on average, you will earn $1,000,000 more during the span of your career than someone with a high school diploma. Having an advanced degree leads to a number of opportunities that simply would not be available without an education. That being said, completing your education also brings on a financial burden. Since most people are unable to pay for their education out of pocket, student loans are very common among recent college graduates. Because of the astronomical cost of attending a college or university, many need to take out multiple loans just to have enough to cover all their expenses. When the payments for these loans all come due just a few short months after graduation, they can be a major financial burden. To help ease the monthly cost, many people choose to consolidate their student loans.

When consolidating all of your student loans into one larger loan, you can save yourself a significant amount of money each month. If, however, you would also like to save money long-term, you will need to be very careful when choosing a lender for student loan consolidation. Most importantly, you need to shop around to find the best interest rate. Thankfully, there are a few simple tips to keep in mind to ensure that you will get the best possible rate. Before you even start shopping for a loan, check your credit score. Make sure there aren’t any false reports. If you find anything that doesn’t look right, contact the credit bureau to try to get it removed. Doing so can boost your credit score and increase your chances of getting an attractive interest rate. You should also calculate the amount you would pay in interest over the life of your current loans and compare that to what you will end up paying over the life of a consolidated loan. You are likely to save the most on interest if you do not use the consolidation as a way to greatly lengthen to repayment term of your loans.

Since interest rates are largely based on your credit score, student loan consolidation may not be the best way to save money on interest if you have bad credit. If, however, you are able to pay off any outstanding debts or work with past creditors to have negative items removed from your credit report, you may be able to drastically improve your credit score. If you are able to put off consolidating your loans until you have improved your score, your chances of getting an affordable interest rate will be much greater. Once you are ready to begin applying for consolidated loans, do not apply for more than a few at a time. When multiple inquiries are made to your credit report in a short period of time, it can actually lower your credit score. By applying for only a few loans, you will actually have a better chance of being approved and locking in an attractive interest rate.

How to Choose a Lender for Student Loan Consolidation

If you are having trouble keeping up with your multiple student loan payments each month, you are not alone. Millions of people are struggling to repay their student loans while still keeping up with the rest of their financial obligations. Thankfully, there are options that can help ease your financial burden. For many individuals, student loan consolidation is a great way to reduce your monthly bills while still making payments.

In simple terms, student loan consolidation refers to taking out one or two large loans to replace all of your smaller loans. At first glance, it may be difficult to understand what makes this option so beneficial, but the benefits are actually numerous. When you consolidate, your monthly payment is almost always less than the sum of the payments you were making in the past. You will be paying less interest, and often you can extend your repayment term. When you have longer to repay your student loans, you will not need to pay as much each month. In addition, consolidated loans are also much more convenient simply because you will no longer be responsible for making as many individual payments each month.

There are seemingly countless lenders that offer student loan consolidation. Choosing the right lender is a difficult but very important process. If all of your student loans are federal, you best bet it to simply use federal consolidation lenders. Doing so is more convenient because these lenders are very familiar with federal loans. They also typically offer lower interest, and they are easier to apply for. If you have private student loans, however, choosing a lender can be more complicated. Private loans should be consolidated through private lenders because federal lenders typically charge high interest rates to consolidate non-federal loans. When trying to choose the best private lender to consolidate your student loans, you will need to take a careful look at their rates and terms. Interest rates can vary greatly from one lender to another, so it is a good idea to take the time to do careful comparisons. When looking at interest rates, it is often wise to choose a loan with a fixed rate. These rates are not impacted by fluctuations in the market, and they ensure that your monthly payment will stay the same.

Just as it is very important to be careful when choosing a loan, it is also very important to carefully choose a lender for student loan consolidation. Choosing the right lender can save you a significant amount of money each month while still allowing you to fulfill your student loan repayment obligations. Choosing the wrong lender, however, can end up costing you money. Always make sure you know exactly how much you will be paying each month before applying. Without this information, you may end up unknowingly applying for a loan you can’t afford the payments on. By taking the time to do careful research, however, you can consolidate your student loans in a way that is very affordable and will ease your monthly financial burden.

How to Consolidate Federal Student Loans

Although many students are able to qualify for a variety of scholarships and grants, they typically are not enough to cover the entire cost of a college education. As education costs continue to rise, more and more student find themselves in need of additional funding to help cover all their expenses. Because they are widely available to most anyone who is pursuing a college degree, federal student loans are very common. Although they are easy to obtain, federal loans do have their limitations. Most federal loans only allow the student to borrow a set amount of money even if their expenses are higher. As a result, many individuals end up taking out multiple loans. Doing so can make getting an education possible, but it can also make repayment difficult.

If you had to take out multiple loans in order to pay for your education, you will be responsible for making multiple payments each month. Repaying multiple loans can be a burden for numerous reasons. Paying multiple loans is expensive, and keeping track of multiple due dates is challenging. By consolidating your federal student loans, however, you can greatly reduce the burden.

By consolidating your federal student loans, you are essentially turning several small loans into one larger loan. Often the larger loan has a longer repayment term that makes your monthly payment lower than the sum of the individual payments you were originally responsible for. In addition to being more affordable for most recent graduates, making just one payment is also much more convenient.

Consolidating your federal student loans is simple. In many cases, you may not even need to talk to a loan adviser. If you are able to manage your loans online directly through your lender, you may be able to apply for a consolidation directly from your online account. In this case, there should be a link that says “Manage Your Account” or something similar. If you are unable to apply directly from your online loan account, you can visithttp://loanconsolidation.ed.gov/. There you will be able to find additional information including resources to help determine whether or not consolidation is right for you. You will also be able to learn more about additional options including income sensitive consolidation. You can apply for consolidation directly on the website or by calling 1-800-557-7392. This number can also be used to contact the Department of Education in the event that you have any questions or concerns regarding your federal student loans. The website also has a printable form that you can print, fill out, and mail in. Once you have applied, you will be able to check the status of your application here as well.

As with any loan, be sure to carefully read the terms and conditions prior to applying, and ask questions about anything you don’t understand. Before you start filling out your application, it is a good idea to gather all the information you will need. Make sure you have recent statements from all your federal loans. You will also need your Federal Student Aid PIN if you want to sign your documents electronically. If you do not have a PIN, you can apply for one athttp://www.pin.ed.gov/.

Thanks to federal consolidation loans, most people are able to consolidate their student loans quickly and easily. In doing so, you can make paying off your debt much more manageable and have more money left over at the end of every month.

The Benefits of Student Loan Consolidation

Graduating from college and embarking on a new career is easily one of the most exciting times in a person’s life. After graduation, it seems as though the options are limitless and you are free to begin living your adult life in the way that you have chosen. Within a few months after graduation day, though, things can become a bit more stressful. Maybe the job market isn’t quite what you had hoped, or maybe entry level jobs in your chosen career don’t pay as well as you had anticipated. Maybe money isn’t the problem, but you’re spending so much time building your career that you don’t have time to keep up with all the bills that keep piling up. In any case, managing your student loans can be a challenge, especially when you have several.

For many recent graduates, the financial burden of repaying student loans is a lot to handle. While college prepares you for a good paying career, it is often difficult to land a good job right after graduation. Sometimes these positions simply aren’t available while other times the entry-level jobs just don’t pay very well. When you have multiple student loans from federal or private lenders, it can be difficult just to keep up. Paying multiple loans can cost you a lot of money and time. Unless you are extremely organized, remembering to pay several different loans each month can be a huge challenge especially when you are working hard to build your career and your life and manage several new responsibilities.

The good news is that repaying your student loans doesn’t have to be a major challenge. There are several options for consolidating both federal and private student loans. By consolidating, you will be able to combine all your loans into one or two larger loans. This means that instead of needing to make several payments each month, you will only need to make two at most. In addition to being much more convenient, consolidating your student loans can also be much more affordable. Typically when you consolidate your payment will be less than the sum of all your previous payments. You may also be able to drastically lower your interest rate. When most students take out loans for the first time, their credit history is very limited. As a result, they do not get the best interest rates. If you used credit responsibly throughout your college years, however, your established good credit score can qualify you for much more attractive interest rates.

Although student loan consolidation is a great way to reduce your monthly financial burden and make repaying your student loans much less stressful, it does require planning and research. This is especially true if you have private student loans because there are countless consolidation plans. Before applying for any type of loan consolidation, always be sure to read all the terms and conditions, and find out exactly what your new monthly obligation will be. With careful planning, consolidating your student loans can put you on the path to having additional time and money each month.

How to Consolidate Private Student Loans

The months following college graduation typically go by in a blur, and before you know it, your first student loan bills will start coming in the mail. If you, like most students, had to take out numerous loans to cover your education expenses, trying to make all your monthly payments can be a huge burden. For many people in this situation, student loan consolidation is a good option. Consolidating your private student loans is a bit more challenging that consolidating federal loans, but doing so could save you hundreds of dollars each month.

Private student loans, or loans that are not provided by the federal government, can be consolidated by a number of different lenders. When looking to consolidate these loans, your best bet is to start with the bank you originally got your student loans through. Because you already have an established account with them, they are more likely to be able to offer you an attractive consolidation option. Before accepting any particular loan, though, you should always check rates and fees with other banks and lenders. When you are looking for a consolidation loan, you should always have all the necessary information to fill out an application. At minimum you should be able to provide personal information such as proof of residency and monthly income. You will also need to be able to show statements from your current loans. Be sure to read the terms and conditions of a loan carefully before filling out an application.

One of the primary concerns when consolidating your private student loans is the interest rate. Ideally, your consolidated loan should carry a lower interest rate than your individual loans. This is very important because when you consolidate loans, you will have longer to pay. If you are paying the same interest rate on your consolidation, you will end up paying significantly more in the end due to the increased repayment period. You will be able to qualify for the best interest rate if you have good credit or you have a co-signer with a good credit score. Often you will have a choice between a fixed rate loan and a variable rate loan. With a fixed rate, you are guaranteed to pay the same interest rate until the loan is paid in full. With a variable rate, however, your interest rate will change. Often when consolidating student loans you will have the option of paying a very low interest rate in the beginning and paying more near the end of your repayment term. For many recent graduates this is an excellent option because it will allow them to make lower payments while they are trying to start their career. Prior to making a decision, you should carefully weigh out your options and decide which one best fits your budget.

Consolidating your private student loans is a great way to save money. It can also make it much easier for you to keep up track of your finances and avoid lost or missed payments. In addition to reducing your monthly burden, consolidation can also help you protect your credit score and make it easier for you to qualify for financing in the future.

Consolidating Student Loans with Bad Credit

If you are struggling to make your monthly student loan payments, you are not alone. Millions of recent college graduates find it nearly impossible to make even the minimum monthly payments when they have numerous student loans to repay. For many, consolidation is a great way to lower payments and extend the repayment period. Unfortunately it can be difficult to consolidate your student loans if you have had financial problems in the past. Thankfully, though, there are ways to consolidate your student loans even if you have bad credit.

If you were able to get through college with just federal loans, consolidation is a simple process even with bad credit. You will be able to qualify for federal consolidation regardless of your credit score. If you had to take out private loans, though, things can be a bit trickier. Most private student loan consolidations are based on your credit score. Not only will your score determine your interest rate, it will also determine your eligibility. Unfortunately many lenders such as banks and credit unions may not be able to offer you a consolidation loan if your score is too low. There are, however, things you can do to improve your chances of approval.

One of the easiest ways to get a consolidation loan when you have bad credit is to find a co-signer. When you have someone with good or excellent credit co-sign on a consolidation loan, the lender will take their credit score into consideration. It is important to note, however, that if you default on the loan, your co-signer’s credit score will be damaged. If you are unable to find a co-signer with a high credit score, there are simple ways to quickly improve your own credit score. By paying down debt and reducing the number of accounts you owe money on, you can actually boost your score by several points in a very short amount of time.

Even if you are unable to find a co-signer or reduce your debt, you may still be able to consolidate your private student loans with bad credit. Although most traditional banks will be unable to help you, you may be able to find a lender on the internet. In response to the growing number of people with bad credit, more and more online lenders have popped up to help people regardless of their credit situation. Before applying with an online lender, be sure to check with the Better Business Bureau. If you find that they are a legitimate lender, fill out the application carefully. Always be honest about things like your income. It may be a good idea to apply with two or three lenders. Doing so will allow you to compare interest rates and choose the lender that best suits your needs. When obtaining a consolidation loan with bad credit, you should be prepared to pay higher that average interest rates, but you should still try to find the lowest you qualify for. You should not, however, apply with every single bad credit lender you can find. Doing so can actually further reduce your credit score.

Once you have been approved for a student loan consolidation, it is important to repay the loan responsibly. By making your full payment on time each month, you will be able to improve your credit score over time. In time, you may even be able to refinance at a lower interest rate.

Joint Student Loan Consolidations

Attending college is a very exciting experience in a young person’s life. Upon graduation, they have a shiny new degree that opens up a whole new world of opportunities. Due to the high cost of education, most students also leave with thousands of dollars worth of debt from student loans. Since the college years are also a very social time, many students also leave college with a new spouse. In this case, there may be twice as much debt to worry about. Starting a new career after college graduation can be a challenge, and beginning a marriage adds additional stress to the situation. When the bills for student loans start rolling in, it can feel like keeping up is nearly impossible. In this situation, student loan consolidation may be a good option.

Although most people know that they can consolidate their own federal and private student loans, they may not know that is it also possible for couples to consolidate loans jointly. This means that instead of each person being responsible for several loan payments each month, they may be able to consolidate all their loans together and make just one monthly payment. There are, however, a few conditions that must be met in order to qualify. Most importantly, couples usually must be legally married. Before applying for joint student loan consolidation, there are a few important things that you should keep in mind. While consolidating your loans will reduce your monthly payments and extend your repayment term, it can cause complications in the future. If you and your spouse ever get divorced, you will each be responsible for half of the loan. In other words, once your loans are combined, you will not be able to separate them based upon the original amount each person owed. If either you or your spouse has significantly more student loan debt, keeping your loans separate may be a better choice.

If you believe that joint consolidation is the right option for you and your spouse, the application process is fairly simple. If you are consolidating federal loans, you will need to contact the Department of Education. This can be done at http://www.loanconsolidation.ed.gov/ . There you will find online application forms as well as contact information if you need to speak with a loan adviser. If you are consolidating private loans, you should start by contacting that original loan providers. If you and your spouse have loans from several different private lenders but you currently have a joint account at another bank, they may be your best choice for jointly consolidating your loans. You will both need to be present to apply. When you meet with a lender, you both should have your identification, social security number, and proof of residency, income, and employment. You may also need to show your marriage license or other proof of marriage. Your loan will be approved or denied based upon both of your credit scores. The interest rate will be determined the same way.

Joint student loan consolidation can be a good way to reduce your monthly burden. Doing so will provide you with more money and time to spend with your new spouse as you work toward building your new life together.

An Overview Of Student Loan Consolidation

Going to a college or university to further your education and earn a degree is one of the best ways to invest in your future. In fact, studies have shown that people with a degree typically earn one million dollars more throughout their lifetime than those with just a high school diploma. The extra knowledge and opportunities that come with a college degree come at a price, though. While there are numerous scholarships and grants available, the majority of students rely on student loans to pay for a large portion of their education.

Student loans come in many different forms, and each loan has different terms. Because most loans only allow a student to borrow a certain amount per semester or in total, many students end up taking out a number of federal and private loans. Once you graduate, you will be responsible for repaying all these loans. Although most lenders allow you six months free of payments after gradation, this time goes quickly, and your mailbox is likely to be soon filled with individual bills from each of your student loan providers.

Although graduating from college and embarking on a new career is a very exciting time, it can also be very overwhelming. With the increased paychecks from your new employer come increased bills and living expenses. When you have multiple student loans from different lenders, paying them back can be both a mental and financial burden. Thankfully, there are options for student loan consolidation that can make repaying your loans much simpler.

In the most basic terms, consolidating allows you to combine several small loans into one larger loan. By doing so, you will only be responsible for one or two monthly payments instead of several. Not only will this save you time and postage, it can also greatly reduce the amount you are responsible for paying each month. If all of your loans are either federal or private, you will be able to take out just one consolidated loan. If, however, you currently have both federal and private student loans, you will need to consolidate each set separately. Private and federal loans cannot be consolidated together due to their varying terms and conditions.

Consolidating your student loans is almost always a good idea. Keeping track of multiple loans is a challenge even for the most organized individuals, and missed payments can quickly damage your credit. Many recent graduates are also able to consolidate their loans at a lower interest rate than the original loans due to an improved credit rating. Depending upon your exact financial situation, consolidating your student loans may even allow you to extend the amount of time to pay your loans off or pay them off quicker. Whether you have federal or private student loans or if you have both, it is important to do your research before applying for any type of loan consolidation. The terms can vary greatly, and only by taking your time to perform careful research will you be able to choose the option that works best for you.

Student Loan Consolidation Process

There are many benefits to consolidating your student loans. Lower monthly payments over a longer term, for example, can really ease your financial burden if you are currently struggling to make your monthly loan payments. Conversely, depending on the terms you negotiate with your student loan consolidation company, you also have the flexibility to pay your student loans off a lot more quickly and thus pay less in interest. Lower interest rates translate to potentially thousands of dollars in savings over the terms of your consolidated loan. Moreover, student loan consolidation is very affordable; if you consolidate through the federal government it may even be free whereas private loan consolidation companies will probably do it at a relatively low cost. The interest you pay on student loans is also tax deductible. Best of all, you have the opportunity keep more of the money you earn each month and start paying yourself. 

Before you can consolidate your loans, you need to consider a few things. Firstly, you need to find out whether your loans can even be consolidated. Most federal loans like FFELP loans (including Stafford, PLUS, and SLS), HEAL, NSL, FISL as well as Guaranteed Student Loans and Direct Loans provide that option. However, you cannot consolidate your federal loans if you are still in school. Another thing to keep in mind is that federal and private loans cannot be consolidated together; if you have both, you'll end up with two consolidated loans - one federal and one private. You also need to consider whether consolidation is right for you. If you go with a fixed rate consolidation option, then regardless of whether interest rates go up or down, yours will stay the same. Therefore, if you expect rates to plummet it might be best to hold off for a little while. 

Once you've made a conscious decision to consolidate your student loans, you need to follow a process to secure a loan whose terms fit your needs. This is where the due diligence comes in. Here is a quick synopsis of the essential steps we recommend: 

1. Compile a list of student loan consolidation companies that interest you and contact them to get quotes and gain a detailed understanding of how their process works. Find out the interest rate and the terms and conditions you would be bound to. Be sure to ask questions if anything is unclear.
2. After doing your due diligence, decide on the company with whom you wish to consolidate your loan with and fill out a consolidation application with them. The consolidation company will then process your application and consider factors such as your debt amount, income, and credit rating and make a decision as to whether to approve or deny you. If things go well, you may be approved within a few days.
3. Once you've been approved, you will be provided with a contract detailing the terms of your consolidated loan. Be sure to read it carefully! 
4. Sign the contract when you are satisfied and then start making payments as per the terms you agreed to. The loan consolidation company will pay all your student loan companies and you would owe them one monthly payment.

Student Loan Consolidation rebate Explained

Student Loan Consolidation rebate Explained
By Bill Darken
According to aamc.org, student loan consolidation means paying off or refinancing multiple loans with one new loan. To place it in simpler terms, student loan consolidation is gathering all your debts from various creditors and then tying them together under one, single creditor. It is just a matter of taking one big loan to pay off the other smaller loans. In return for this service, the consolidator sets the interest rate of the consolidated loan based on existing legal parameters.

Student loan consolidation is not much more different than credit card debt consolidation or any other debt consolidation activity. As a matter of fact, it means the same thing. For people with multiple credit cards, they simply consolidate all their credit under one credit card. This makes keeping track of payments easier. At the same time, creditors eagerly welcome your business by offering lower than average interest rates and free sign-ups.

In the internet alone, there are hundreds of businesses that specifically offer student loan consolidation. Open up another browser to take a look at some of their websites. These companies offer different interest rates. Some of them will offer free sign-ups while others will charge a minimal sign-up fee. Again, this is really no different from other loan consolidation programs. A loan is a loan whichever way you look at it.

Let's take a more detailed look at student loan consolidation. Interest rates for student loan consolidation stand at 3.2 to 4.5 percent on average. Some creditors may offer lower or higher rates than those mentioned here. Other creditors also offer a rebate of up to $1,800. Creditors also advertise a reduction of payments that range anywhere from fifty to sixty percent. A 1.75 percent total discount on federal rates after twenty four months for federal student loan consolidation is also being offered by another creditor.

The only significant difference between student loan consolidation and general credit consolidation is the fact that a student loan is guaranteed by the United States government. Interest rates are based on the 91-day Treasury bill rate established during the last day of auction in May of each year.

A student may consolidate a loan once, and only once, with a private lender. Thereafter, any other consolidation is to be made direct with the Department of Education. If the loans being consolidated carry different interest rates, an average is computed to come up with the new rate. Re-consolidation does not change the interest rate of the previous consolidation. There are no fees for student loan consolidation. Instead, the government subsidizes the private lender for student loan fees.

Student loan consolidation is also a big help to a student’s credit rating, assuming of course, that the student is responsible enough to keep up with payments. Usually, most federal student loan companies submit reports to credit bureaus. However, there some companies that do not submit reports. If you, as a student, would like to use your consolidated student loan as a basis for your future credit rating, it is highly suggested to select a creditor that submits credit reports to the credit bureaus. Having an existing credit record will be a big help in securing future credit when your schooling is done.

With all these details and selections to choose from, it sometimes becomes dangerous to actually apply for a student loan consolidation program. There are several websites than can be used as helpful references when it comes to choosing a legitimate creditor. A couple of these websites are www.product-reviews.org and www.consumer-protection-company.com.

Rebates and federal rate discounts aside, the real target of student loan consolidation, or any other debt consolidation program for that matter, is to lower the interest rates of the various, existing loans. The convenience of a single billing statement comes as a secondary benefit. Student loan consolidation is a great help if you are seriously considering taking charge of your time and finances. If anything else, it lessens the amount of worrying which translates to an ability to focus on more important academic activities.

In the interests of convenience and peace of mind, consider the benefits of signing-up for student loan consolidation. The student loan consolidation application process is as easy as eating pie.
Author - Bill Darken - There"s a good student loan area along with more relevant general loans assistance such as home, car, and consolidation loans. There are highly informative eye opening articles and up-to-date loans news as well, see it here at student loan consolidation or if the previous link is not working, you can paste this link in your browser - loans-only.com


   

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