In many cases the students borrow money from several lenders, both the private and the federal loans and this will lead to a situation, when the debt management is difficult and expensive. Cialis Professional The student loan consolidation is the solution for this, plus it will offer other benefits.

1. What Is Student Loan Consolidation?

The student loan consolidation means that a graduate will form a single debt by combining all the debts into one debt and with one repayment plan. All the previous loans will be paid away and a new loan agreement will be negotiated.

It is important to note, that the private and federal loans cannot be consolidated together, but you have to form two consolidated loans, one for private ones and one for the federal ones. The reason is, that the federal debts have special terms. You can ask offers from many banks or loan lenders or to go directly to the Department of Education to consolidate.

2. What Are The Benefits?

You have two main reasons for the consolidation, to get a simple one agreement system and to get lower monthly repayments. You can convert the variable interest rate into a fixed one to save money, but the biggest savings can be done by extending the repayment time from 10 years up to 30 years. If you want to pay over your plan, it is possible without any penalties.

3. What Are The Disadvantages?

The lender will always get his money. So if you will extend the repayment time, you will pay more interests during the whole running time of the loan. Another possible disadvantage is, that once you have consolidated your student loans, you cannot separate them again, which can lead to the loss of the loan deferments.

4. Can I Qualify?

There are some rules. First you have to be in your grace period or already started the loan repayments. And you cannot have earlier student loan consolidations done for the same loans. But if you will go back to school and will take a new student loan, then you can consolidate once more. The smallest loan sum of the federal student loan is $ 10.000 and for the private loans about $ 5.000.

5. When Is The Right Time?

There are two possible times. During your grace period, which is the 6 months time after the graduation, or after you have started the repayments. It is recommended, that you will start during the grace period, because then you have a chance for the lower interest rates.

After you have decided about the consolidation, the first thing to do is asking the offers from the bank and loan lenders. If they seem confusing, it is wise to turn to the qualified loan counselor, who can calculate, if the consolidation can honestly help you and to explain the details.

Author Bio: Juhani Tontti, B.Sc., Marketing. When you will consolidate student loans and think the school loan consolidation you have to get the guidance from the counselor. Visit: student loan consolidation

Category: Finance/Credit/Loans
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