Student Loan Consolidation Interest Rate Guide

Education, as important as it is, costs money and unfortunately these days, good education often means more money spent. You or your parents may have saved money for your college education but most often than not, you still have to take out federal student loans in order to cope up with the high costs of college education.

Before you graduate, you may have more than one, each with its own interest rate, payment schedule, and structure. To manage your debts more efficiently, you need to consolidate all of it into one, with its own consolidation rate.

Consolidation means grouping your disparate debts into one loan and making a single payment to a consolidation company with a preferably lower the consolidation interest rate. There are two federal programs that are available nationwide, the Stafford and Perkins Programs. Under these two programs, there are several other types of financial assistance programs existing.

It is normal for a student to graduate from university with various student loans. When interest drops and when you want to simplify payment, it is best to think about consolidating your debts. But do this only after careful deliberations because there are pitfalls to consolidation.

One of the primary considerations when thinking of debt consolidation is to have a lower monthly payment through lower interest rate. Your student loan consolidation rate will vary from that of other students. This is because consolidation interest rates are fixed that is equal to the weighted average of the interest on your existing loan rounded up to the nearest eighth of one percent.

The consolidation rate is fixed for the duration of the loan and capped at 8.25%. There are various repayment options when you consolidate your federal student loans and you should pick the one that is most convenient for you.

Consolidation is a great tool to help students deal with their various student loans, but only when it is used properly. One of the most important factors to consider when consolidating your debts is the timing of it. Do not be tempted by low consolidation interest rate and consolidate your debts right away.

Remember, once you've consolidated, you lose all grace period or the time you have to start paying your debts. If you consolidate too early, and you haven't found a source of income yet, you have to start paying your consolidated debts when the due date arrives.

Once you've decided to consolidate your debts into one, you can apply for a consolidation loan to a lender company of your choice. You'll fill up an application with your information and your lender, after processing your application will start loan retrieval process.

The consolidation company will contact your lenders to know the exact amount of your outstanding debt. The company will send payments to your lenders and your student loan will be marked as paid in full. You will then receive a monthly statement bill from your consolidation lender which you must pay regularly.

By: Troy Finerley

Student loan consolidation interest rate guide for a better choice. http://www.studentloanconsolidationinterestrate.co/

Student Loan Consolidation - A Way to Save Money

So you have a great need to use every penny as smart as possible, i.e. to get the biggest benefit from every dollar. If you have several student loans, both the private and federal ones, you can save money with a simple student loan consolidation, even hundreds a month!

1. The Student Loan Consolidation Can Be Done For Private And Federal Student Loans.

Student loan consolidation can be done for both the private and federal loans. The consolidation is a great tool for simplifying the monthly bills providing an immediate payment relief and the long term benefits. However, it is important to note, that the federal loans must be consolidated as one separate group and so must the private debts too. You cannot mixed them.

As to the federal loans, which you can consolidate only once, the interest rate will be fixed during the rest life of the loan. When you can do the consolidation during the grace period, it is the deal with the fortune, which interest rate you will get. You do not have to go through the credit check and there is no application fees

2. The Debt Refinancing.

If in your case you have just graduated and got the work, your credit score may have improved compared your student times. Now when you will do the consolidation, you will refinance the interest rate and the repayment time. This process is the most effective thinking the cost savings.

3. Consolidate During The Grace Period, You Can Reduce The Interest Rate By 0,6 %

When you consolidate during the grace period, within 6 months after the graduation, you can save in the interest rates by 0.6 %. During the times, when the interest rates are historically on a low level, just by renegotiating the interest rate can bring the much needed help.

4. How Much Are The Savings?

The ideal situation would be the one, when the interest rates are historically low. Then by consolidating and refinancing the whole debt package, you can get the maximum saving. To take examples, if your student loan is $ 10.000 and you extend the repayment time from 15 years to 25 years, you can save over $ 230 a year. With the $ 100.000 debt the saving is over $ 2.400 a year without the interest rate changes.

5. Start To Calculate The Benefits From The Present Loans Consolidation.

When you think the student loan consolidation rates, you have to take into account two things: your present loan terms consolidation rate and the future rates after your student loan possible refinancing. It can happen, that only the new interest rate brings the saving you need and there is no need to extend the repayment time.

However, remember that you can consolidate the debts only once. This means, that it may be wise to plan your monthly payments so, that your monthly expenses will be on the lowest possible level. This is a careful plan and will help you, if you will meet sudden changes with the incomes or living costs.

By: Juhani Tontti

Juhani Tontti, B.Sc., Marketing. You can do the school loan consolidation only once during the 6 months grace period. The student loans will be changed as one loan. Visit student loan consolidation: http://www.studentloanconsolidationtips.org/