Monday, July 6, 2009

Student Consolidation Loan: How Consolidating Student Loans Can Keep You Out Of Debt

Student Consolidation Loan: How Consolidating Student Loans Can
Keep You Out Of Debt
By Manu Goel


The repayment of Federal student loans generally begins after
the borrowing student has completed his or her education and an
additional grace period after that. However, due to various
reasons students opt for student Federal loan consolidation.
However, there is certain eligibility criterion that you must
fulfill and a process that you must follow before you can be
entitled to Federal debt consolidation of student loans. Again,
it is important to note here that such processes and criterion
might be reviewed and revised from time to time. So, it’s
important that you check on them with the concerned authority.


As per the Higher Education Reconciliation act of 2005, the
eligibility criteria for student loan consolidation by FFEL and
Direct Stafford loan borrowers has been defined a bit
differently. Now, such borrowers will not be eligible for
consolidation loan if they are still studying i.e. they are not
eligible until the time they leave school or graduate or have
enrollment that is less than half-time. For PLUS loan borrowers,
the consolidation eligibility begins as soon as the full
disbursement has happened.


Private student consolidation loan is a low interest student
loan. People having outstanding non-federal education-related
expenses can apply for this loan. But he or she should be a
holder of US citizenship. If not, the applicant must at least be
a permanent resident.


Generally, the minimum loan amount is $10,000 while the maximum
amount that can be borrowed is $250,000. The amount also decides
the repayment periods. If the amount borrowed is below $40,000,
the repayment period is fixed at a maximum of 20 years. However,
if you borrow more than $40,000, you can enjoy a longer
repayment period of up to 25 years.


This student loan consolidation is quick to get approved. The
interest rate on private student consolidation loan is the prime
rate and is adjusted on a monthly basis. The interest rate is
also dependent on the credit record of the borrower. A good
credit record will attract a lower interest rate. As such, the
interest rate is variable.


The prime rate is 7.0 percent (at the time of writing this
article). Initially the margin may vary between 0 percent and
9.90 percent and is adjusted based on the changes in the margin
adjustment index.


This student loan debt consolidation can be utilized to
consolidate all debts relating to education, which also include
private loans as well as federal student loans. If you want, you
can consolidate for more than one child. Spouses have the choice
to consolidate multiple loans into a single consolidation loan.


About the Author: Manu Goel is senior editor at
http://www.student-loans101.com. Where he writes various
articles on the student loan consolidation, benefits of
consolidation, how to consolidate, and more. You can read more
on student loans consolidation at
http://www.student-loans101.com/article.htm


Source: http://www.isnare.com


Permanent Link: http://www.isnare.com/?aid=174688&ca=Finances

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Student Loan Rates - Tips For Student Loans

By Joel Davis
Getting a college education for many people sees the need for astudent loan. Finding the best student loan rate of interestfrom a financial institution is an important consideration thatmay save you money when the time comes for student loanrepayment.
Generally a student loan is not required to repaid until thestudent graduates and has finished his or her schooling. It’svery easy during the educational period to be unconcerned abouta loan and not have some sort of repayment plan in mind.
The student loan rates will then be an important factor as thegraduate will be starting a new job, possibly finding newaccommodation, and have travel and living costs to cover. Everycent will count in the beginning and even a difference of 1% inthe student loan repayment will have an effect on livingstandards.
Read the contract fine print;
Some lenders charge fees to set up a student loan that canincrease the cost of the loan. Often a lender will offer a lowinterest rate that seems most competitive. However these lowrates are often off set or can actually cost more due to thestudent loan fees that are charged.
On the flip side lenders that don’t charge the fees will rollover the costs into the interest rate. As a general rule threeto four percent in fees is about the same as a one percenthigher interest rate.
Check to see if the student loan interest rate is fixed orvariable, a fixed loan may be more expensive than a variablerate at the time of application but if the variable rates are torise in the future the fixed loan would have been the bestoption.
This is something where the student will have to consider theeconomy and seek out advice on the direction of future interestrates. Use a student loan calculator to calculate future loaninterest rates. This can give you a general idea of what theloan will cost you per month but remember it is only anestimate.
At the time of writing a Stafford Federal loan has a 6.80%fixed student loan rate. Compared to a student loan rate with anaverage private loan rate of 8.25%, you’ll quickly see why manystudents turn to the Federal government for the best loan rates.
Find out when the interest begins accruing. Typically, thestudent loan rates won't take affect until six weeks until afteryou graduate. That means you have time to save up in order topay your loans back. But you should make sure of this so thatyou're not caught by surprise when that first bill becomes due.
It’s always a smart thing to shop around for the best studentloan rates available to you; you may get lucky and find even abetter loan than a Stafford loan has to offer. Taking thesesteps will give you peace of mind and be stress free, allowingyou to focus on your main goal, completing your studies andgetting the education to go out and get that great job orbusiness you deserve.
About the Author: Joel Davis is the webmaster athttp://www.studentloan-blog.com for making informed choices andstudent loans easy to understand.
Source: http://www.isnare.com
Permanent Link: http://www.isnare.com/?aid=231612&ca=Finances