Consolidation study loans

Consolidation Loans are a special type of loan which combine several student or parent loans into one bigger loan from a single lender. Then it is used to pay off the balances on the other loans. It is very similar to refinancing a mortgage. 

Consolidation loans are available for most federal loans, Health Professional Student Loans, NSL, HEAL, Guaranteed Student Loans and Direct loans. Some lenders offer private consolidation loans for private education loans as well.

The interest rate on a consolidation loan is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest 1/8 of a percent and capped at 8.25%

Both student and their parents are able to consolidate their education loans. 

Any federal education loan can be consolidated. You can even consolidate a single loan. There are, however, a few restrictions on consolidating a consolidation loan.

Types of loans to consolidate

Consolidation programmes are available for both federal and private loan holder.

Normally, private loan programs interest rates charged by loans providers are higher as opposed to the federal ones.

A private student loan consolidation that many would go for is therefore that which guarantee reduced interest rates to allow them to make some monthly savings.

Most lenders for these will ask you to bring a co-signer who should stay until you show that you can be trusted with your monthly payment obligation.

Federal loan consolidation programs have advantages such as low interest rates, monthly payments and longer payment periods.

This means that every month, one can get to save money they were not able to when they paid the loans separately.

How to make applications

If you want a private student loan consolidation program, you can do so with a brand new private lender or stick with the one who helped you pay your education costs.

For federal loans, there is a designated procedure based on type or simply if it a direct federal loan or any other.

Nothing lacks its critics but before you decide on solving your loan payment problem using this method, ensure that you do thorough research to end up making a wiser decision.




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