Sunday, March 14, 2010

Student Loans - Simple Ideas To Keep Your Costs Low


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Getting through college is not a cheap option and what usually happens is that students pile up debts. Whilst specialist student loans have relatively low interest rates, especially when compared to other loans, when you have lots of them, they really turn into a headache.

And all that stressing about how to pay off your loans can really affect a student's concentration in his or her studies - the last thing they want.

Fortunately, there are now student loan consolidation programs available. By consolidation, it means combining all your student borrowing into one loan.

When you consolidate, you find one lender that would let you borrow an amount good enough to pay all your balances from other lenders. With this, you will only have one lender to worry about and one monthly payment obligation.

This is particularly important when you get to the end of your education and it's time to tie up all those loans together into one better value package. There are plenty of lenders out there perfectly set to help you with this.

Consolidating Loans Considerations

Of course, it is best to look for the loan consolidation program. To do this, you must know all your options, do plenty of research, and stock up on your knowledge about the whole process so that you can make an intelligent choice.

Federal loans are usually the one that you can easily consolidate. But do not worry if your current loans are private, because there are also many lenders out there who offer private student loan consolidation.

Take note, that even though interest rates may rise a bit when you consolidate your loans, there may be no costs involved when you consolidate. If a lender is asking you for a fee for the consolidation aside from the monthly payment obligation (plus interest) you have to pay, then you are probably need to ask questions of them and try to negotiate that out of the equation, or at least onto the end of the loan amount.

Always remember that there is really no need for an upfront fee for student debt consolidation.

Getting The Best Consolidation Interest Rates

As for the interest rates, here are some facts to take note of. Student loan consolidation rates are computed as the overall weighted average. This means that all the interest of the loans you are going to consolidate will be computed and the average of that will become the consolidation interest rate.

Now, what about the qualifications involved of student loan consolidation? A student can consolidate as well as the parents of a student. It's just that those parents will have to consolidate the student loans they borrowed separately from the loans borrowed by their child.

Take note also that students who are married, usually cannot consolidate together their student loans now, unlike before.

Students can only tidy up their loans during their loan's 'grace period' (often the first six months after graduating), or subsequent to their loan's entry to the repayment stage.

Other Student Debt Considerations

All student loan consolidation, private or Federal, can be done with any lender in the market. It is already the student or the parents' discretion to choose the right lender for them. If the numerous loans you have acquired are from a single lender only, consolidation can still be done with still any lender.

Student loan re-consolidation can also be done (yep, you can do it again, but watch for any early exit penalties!). There is however some conditions to this. The conditions include that when re-consolidating, other loans will be included with the consolidated loan. Another thing is that re-consolidation can only be done once and once only.

Bottom line is that student loan refinance through consolidation can also be a good option for you to lessen your loan burden at a vital time in your career and life.

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