There may come a period of time when you might need to pool your resources in terms of your student loan relief products. This is called Education Loan Consolidation, this is really a process where people take student education loans and parental lending products and combine these debt relief loans together. This is loan consolidation for regular loans. The way this particular program works is by you, combine your lending products with one lender after which they are used to pay off the balance on any loan. If you have the loans by Stafford, PLUS and also Perkins Loans, then you’ll be able to consolidate, for example.
What are the interest rates upon Consolidated Loans?
When you have decided to consolidate your student education loans, you will use a new interest rate. The thumb rule is normally 1/8 of a percent from the amount owed although it is not always promising as it is subjective to type of Student Loan Consolidation program you are opting for. There is a cap of about 81/4%. If you have a number of different loans then you should have an interest rate which is averaged together. For an example, if you have got loan for $ 15,000 in consolidated loans then $5000 of that will have a 5. 0% plus the $10,000 features a 6.8%, you will have consolidated interest rate of 6. 2%.
Is there any kind of additional costs on consolidating my Loans?
The only additional cost of any kind you could have is the increase in the interest rate when you decide to consolidate. There is absolutely no fee when people consolidate their lending products. If there are any fees then you should definitely contact some other company for loan consolidation. Do some comparison research to see which companies offer no additional costs. The only additional cost you would have to bear will be the fees charged for training about these plans.
What’s the eligibility criterion for Student Loan Consolidation?
If you are a student or the parent of the student who has brought out a loan then you are definitely eligible for consolidation. If you are a married couple with student education loans, then you are unable to combine your lending products together. You can just consolidate loans which are in your name. As a student you can only consolidate your loans during the grace period for the loan or before you start repaying your student loan. Parents who have taken a student loan can consolidate the PLUS Loans whenever you want.
How can I opt for Student Loan Consolidation?
You hold the freedom to get rid of your loans with any lender. This includes a new lender that holds all of your loans. In this particular case, the lenders may require a minimum balance before they are going to consider consolidating your loans. Some lenders may require a debt harmony of $ 5,000 or more. Others might have a higher minimum balance for debt harmony.
When you encounter some issues with repayment because you have multiple loans, you hold the choice of loan consolidation. With this method, you will have one payment and yes it will satisfy your loan requirements. If you start to fall behind with your payments or once you graduate and you don’t hold the means to make payments then talk to a loan financing company about consolidation.