Student Loan Consolidation

For most graduates, student loans debt becomes one of their biggest headaches and major source of stress. Even graduates who are not considered to be financially needy feel the pinch. Many students have the same questions below about student loans consolidation.

  • What does consolidation mean?
  • What student loan types qualify for consolidation?
  • Which lenders can consolidate my student loans?
  • Should I or Should I not consolidate my loans?

We will try and answer these questions below.

How consolidation Works

Basically a consolidated loan, whether federal loans or private loans, is a new loan. The process is almost like applying for a new loan. You have to find a lender that will consolidate your loans and apply to them. In its basic meaning, the word “consolidate” means to combine. And to most students, student loan consolidation means combining your different loans into one. But in reality this is not exactly what happens when you apply for consolidation. The lender basically pays off your existing student loans, even if they are from different lenders. The lender then replaces them with a new loan. Usually this new loan comes with a different interest rate and an extended repayment period. You also make one monthly payments instead of several payments on different loans. The extended period also means your monthly payments may be significantly lower than your previous payments. This essentially explains how student loan consolidation works.

Should I or Should I not Consolidate?

The answer to this question will vary from individual to individual. We have put together a an assessment survey to help you determine if you should consolidate or not.

But in general, our advice is that if you are comfortably making your monthly payments, then there is no need for you to consolidate. It will be better for you to quickly complete your payments and wipe out the debt. Consolidation is for people who are struggling to make their monthly payments.

Which Lender should I use to Consolidate?

Just like we advice on obtaining any financial aid package, you should always take the government option first when it comes to consolidation. The government provides the Direct Loan Consolidation, Federal Stafford Loan Consolidation, PLUS Loan Consolidation and the FFELP. Don’t consolidate your federal loans into private loan consolidation if you don’t want to lose the benefits of your federal loans.

Student Loans Consolidation Programs.

The federal Stafford loan is the most popular student loans in the country and most students have it. Most students have either the subsidized or unsubsidized Stafford loans and a lot also hold both. It will therefore make common sense that there should be a large program for Stafford loan consolidation.

Stafford loans are not the only loans out there. There are many more loans such as the Federal PLUS loan consolidation, the Perkins Loan Consolidation. You will also find special programs for graduate student loan consolidation and undergraduate student loan consolidation. There are other sources that provide a means to consolidate:

  • Prior to 2006, it was possible to consolidate student loans whiles you were still enrolled in college. This was however stopped. But it is still possible to find one or two lenders that can provide a means for consolidation wiles still enrolled in school.
  • Many students hold private loans that they will like to consolidate. This will require a private student loan consolidation and this means a credit check. If you do not have good credit, how will you be able to take a student loan consolidation for bad credit?
  • In 2007 the government passed the Higher Education Act and this has made lenders very edgy with their loan instruments including consolidated loans. So while one was able to obtain cash-back rebates and  cheap consolidation loans, it is not easy to find these today. But with so much competition in the industry, it is still possible to find a couple of lenders that will be willing to stick out.

Special Student Loans Management Instruments You Might Not Have Heard Of

We are preparing a special page to introduce you to other loan management products you may not be aware of. Graduates holding high value loans such as med school loans will learn about hot to refinance medical school loans. Likewise, law school graduates will also lean about law school loan refinancing options. There is also the chiropractic consolidation loans.

{ 2 comments… read them below or add one }

YazminMolina December 11, 2012 at 5:38 pm

hi, can you pleas have one of your student Loan customer service guys e-mail me @, i need help on setting up my payment account, Thanks

Graduated from Concorde.

money4uni December 11, 2012 at 9:06 pm

Hi Yazmin, what loans do you want to pay and who are your lenders?

Previous post:

Next post: