Student Loan Consolidations – How to Choose the Best Consolidation Program For You
Financial aid has helped a number of students graduate from college. One form of this aid is student loans. A student may have more then one loan with different lenders. Having more then one loan, each loan having it's own due date to be paid and interest rate. Having more then one loan with different billing cycles and interest rates would be confusing. So many loans could lead to some not being paid on time, eventually leading to a bad credit report. One of the best ways to handle these loans is student loan consolidation.
Student loan consolidation allows you to combine multiple student loans into one new loan. This new loan is handled by one company or creditor. The creditor pays the loan in full to the respective creditors leaving only the new loan. Because of this, once approved this cannot be undone. Loan consolidation gives you the convenience of paying one loan to one creditor or company instead of paying multiple loans with different due dates and interest rates. Loan consolidation offers fixed interest rates and a longer payment period, usually 10 to 30 years. A student can get his/her loan consolidation from the U.S. Department of Education or any credit union or bank that is part of the Federal Family Loan. Once a student graduates, they have six months before they have to start paying back their loan. In those six months they are expected to find a job and should be able to pay their debt.
Advantages of student loan consolidation can be cited as the following:
O Interest rates can be less then the average of all the student's multiple loans.
O Lower monthly installments.
O Students save money.
O Loans are paid on time, avoiding the bad credit report that would affect the individual in the future.
Some disadvantages would be:
O Selecting any loan consolidation company doesn't necessarily mean that you're saving money. Some may provide lower monthly rates but a much longer payment period. These could mean paying more then saving.
O Some creditors may have hidden clauses. Always research on a creditor before allowing them to handle your student loans. Know their terms of agreement, rates and penalties.
It's important to do your research when looking for a Student Loan Consolidation Company. It's best to start looking for one before you graduate. You'll find information on such companies online or you can ask your College financial aid office. Asking graduates would also help you find a good lender. When considering student loan consolidation, gather as much information about your debt especially terms of agreement, monthly payments and interest rates. Once you have collected all this financial information give this it to your selected creditor. Research online. Continue searching until you find a company that you feel comfortable with. Compare their offers, quotes and policies. Understand how their policies and process works. Applying with a creditor is the same as applying for any loan. Make sure you know their fees, terms, rates and the penalties.
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