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Consolidate Student Loans
Monday, Jan 5, 2009
Question: Can student loans be consolidated as well?
Answer: Yes, student loans can be consolidated. Typically, the process is split between federal student loan consolidation ("fed consol") and then private student loan consolidation. You should always exhaust your federal loan options first. Federal student loans are issued at lower interest rates with better repayment terms and interest deferments. Once this avenue has been exhausted, you should look into private loans to finance any remaining needs. Unfortunately, the student loan marketplace is struggling with the entire credit crisis and the process has become harder than ever before and you will probably need excellent credit.Thankfully, there are lenders who still offer consolidation loans, and you are not required to consolidate with your original lender, so you should be able to find a lender willing to consolidate your loans. Also, the federal government has a program, called Direct Loans, through which it will directly fund the consolidation of borrowers’ federally insured student loans–you can find out more about this program by visiting http://www.loanconsolidation.ed.gov/
To learn more about student loans and consolidation programs available to borrowers, I invite you to visit http://www.bills.com/student-loans/ In addition, if you submit your contact information on the Bills.com website at https://www.bills.com/studentloan/loan/ we can have several debt consolidation providers contact you to discuss the options available to you.
In addition to consolidation programs, most student loan lenders offer various programs to graduates struggling to repay their loans. For example, many lenders offer some type of “hardship deferral” allowing borrowers to skip payments for a certain period of time, usually for a few months at a time. In many cases, lenders will allow borrowers to defer
their payments several times in a row, providing borrowers with a year or more without payments to help borrowers become financially solvent. In my experience, student loan providers are quite flexible in working with individuals who are struggling to make their payments. However, you must be proactive in communicating your difficulties with your lender, as the lender may be unable to assist you once your loans become delinquent or goes into a default status.
If you consolidate, be sure to contact consolidation lenders to discuss the interest rates they can offer you on your consolidated loans, and how the rates and terms compare with those on your current loans. You may find that your current loans are actually charging you a comparable or even better rate, depending on when your student loans were taken out; loans taken out more recently tend to charge a lower interest rate than older loans. Newer loans usually also have a fixed interest rate as opposed to those loans made before mid-2006, which generally have an adjustable interest rate. To read more about the current status of consolidation loans, you should visit Smartmoney.com. Basically, you need to speak with various consolidation lenders to determine if the loan terms they can offer you are better than those you have on your current loans.
If you
If you consolidate, be sure to contact consolidation lenders to discuss the interest rates they can offer you on your consolidated loans, and how the rates and terms compare with those on your current loans. You may find that your current loans are actually charging you a comparable or even better rate, depending on when your student loans were taken out; loans taken out more recently tend to charge a lower interest rate than older loans. Newer loans usually also have a fixed interest rate as opposed to those loans made before mid-2006, which generally have an adjustable interest rate. To read more about the current status of consolidation loans, you should visit Smartmoney.com. Basically, you need to speak with various consolidation lenders to determine if the loan terms they can offer you are better than those you have on your current loans.
If you
have high interest rates being charged on your student loans (between 10% and 15%), these loans may be private student loans rather than the more common federally insured variety. When most people think of "student loans" they generally think of those loans which are insured by the federal Department of Education, and thus are also heavily regulated by federal law. However, many banks and other financial institutions offer students private loans, which are not federally insured, to help them pay education costs which exceed the amount of their federally insured student loans. These private student loans are basically unsecured personal loans; the only difference is that they are generally not dischargeable in bankruptcy. While the assistance offered on to borrowers on federally insured loan is usually more extensive, consolidation programs are available to borrowers who took out private student loans. To read more about consolidating private student loans, you can visit Finaid.org. If you do not remember if your student loans are federally insured or private, you can contact your lenders to inquire about the types of loans you currently owe.
I hope that the information I have provided assists you in resolving your outstanding student loans, and helps you Find. Learn. Save.
Best,
Bill
www.bills.com/blog/
I hope that the information I have provided assists you in resolving your outstanding student loans, and helps you Find. Learn. Save.
Best,
Bill
www.bills.com/blog/
Also, make sure to get a free financial health check-up with Bills IQ!
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