The fact that education is expensive should not be new to anyone. The first student loan is scary, but throughout the years one soon finds themselves with multiple loans from different institutions, or perhaps many loans from the Federal government. For the student who has more loan debt than they can handle, student loan consolidation may offer a way to manage their expenses and to stay on top of their loan payments. There are several different options when it comes to Federal student loan consolidation and private student loan consolidation available to you. Which one is right for your circumstances depends on several factors about their particular situation.

The first thing that you need to know is that you can only consolidate a loan only once. It has several catches of which a student must be aware before considering this as an option. The first is that it is possible to consolidate a single loan, but this is usually not advisable. If you have already used student loan consolidation once, you have to add new loans in order to get a new loan.

It is possible to obtain a Federal Stafford loan. This option offers the student a fixed rate financing program to already existing programs. It is possible to reduce your payments as much as 53% from previous student loans by using this option. For those who wish to pay off their debts quickly, this is an excellent option. The student can use the money saved in the monthly payments to put on the principle, thus reducing the entire amount owed resulting in a reduction in the total loan amount owed. This is great for students who wish to pay off their debts quickly. It also helps to reduce the total amount owed in another way too, because it locks in a lower interest rate.

Student loan consolidation using the Federal programs that are currently available can help you improve your credit rating as well. However, some may choose to seek a private option, rather than using the Federal programs available. The private plans may be an option for those who have been denied Student loan consolidation by the Federal programs.

As with Federal Student loan consolidation, private plans can help you pay your total loan amount off earlier. However, there are several differences between private plan and programs offered by the Federal government. The first difference is that private plans often have a higher interest rate than Federal programs. Interest rates may vary in private loan programs and the student’s credit rating will be a determining factor in the interest rate obtained. Private programs often offer much more flexibility in determining payment terms. The options often go beyond the 10 year repayment offered by the Federal government. It also has certain programs for medical revenue residency and military deferment available as well. These options can make private programs more attractive than the Federal programs available for some students. There are other reasons besides being turned down for a Federal Student loan program so a private student loan consolidation may be the best option for you.

Author Bio: Stewart Wrighter recently spent time researching student loan consolidation. His son is going to apply for a private student loan consolidation.

Category: Finances
Keywords: student loan consolidation,private student loan consolidation