What To Look For In Good Student Loan Consolidation Companies

By Andrina James

Taking a student consolidation loan at the end of your college life is one of the wisest decisions that you can take. As soon as you graduate and are within your grace period, start inquiring about student loan consolidation companies. You can even do it before to get a head start.

Why Will I Need Student Loan Consolidation Companies?

Most of college students graduate with a debt amount of nearly $20,000. They take loans from different lenders each with high fluctuating interest rates. When they go in for student debt consolidation, these loans are bundled together by the student loan consolidation company and paid off. The student then pays the new lender at an interest rate, which is much lower than the average of all the interest rates of the previous loans taken together. The time period is also long and students have different options of repayment. Thus, student loan consolidation save money and will also make life easier as there is only one loan to repay.

How Will I Spot A Good Company?

First, search on the Internet for information. You will get an estimate of what the different companies are offering in their student debt consolidation programs. Now contact them. Check the following list to know the company that you want to associate with

Do they have a competent student loan consolidation counselor to guide you through the procedure?

Do they explain all the charges and not ask for a large upfront fee?

Do they let you take your time before signing with them for a student debt consolidation program?

Do they clear all your queries and patiently hear you out?

Do they offer any special bonus or special discount?

Do they offer different types of payment option?

Are they accredited by the association of independent consumer credit counseling agencies to consolidate your loan?

If the answers to all the above questions are yes, then you have found yourself a good student debt consolidation company. Before taking their student debt consolidation program, do not forget to check on other offers in the market. Also, crosscheck the “Better Business Bureau” for the track record of the company. Don’t go for the first debt consolidation company you come across, remember your dealing with the company will go on for a long time. So if you feel uncomfortable with a particular company, walk out of it. There will be many student loan consolidation companies offering “no-cost” student loan consolidation, but don’t get lured by them. Always check the interest rate; it should be lower than what you are paying now otherwise you will end up paying more. Also, see that the company does not penalize you for returning your debt before time.

These are the points to look out for while approaching student loan consolidation companies. Take a good student loan consolidation and see your problems vanish.

Student Loan Consolidators Can Shop Around

On July 1, the interest rates for federal Stafford loans will hit the highest level since 2001. The rate for outstanding Stafford loans for the academic year 2006-7 will be 7.14%. New loans issued after July 1 will have a fixed rate of 5.8%.

A lot of student loan borrowers will be seeking out consolidation to lower that rate and their payments. And a new bill will give you a chance to shop around a bit more.

The emergency spending bill signed into law recently eliminated the “single holder rule”. For those of you who didn’t lock in your rate before July 1 — Saturday — you can shop around for a lower rate, since you missed out on one by not locking in your rate.

My parents still receive at least three phone calls a week from people wanting to consolidate student loans. And they haven’t had us living at home with them for years. You can pretty much expect to get more phone calls now that the single holder rule is null.

The rule used to require borrowers whose student loans were all with one lender to consolidate with that lender. They couldn’t go elsewhere for consolidation.

Now, you can shop around, no matter who holds how many of your student loans. However, you need to shop wisely.

Federal law bars most borrowers from consolidating their student loans more than once. You are never told this by the consolidating lender, but it is true. Once you consolidate with a lender, you are stuck with them for life — or at least the next 30 years or so.

So look around a bit before you consolidate. Many lenders have to use the government set rates for Stafford loans. However, they often offer you a reduced rate for having your payments automatically withdrawn from your bank account. Some will even cut your rate if you make so many payments on time. In total, you can have your rate cut by 1.25%.

Read the fine print carefully. Some lenders will take back that rate reduction if you make a late payment in the future.

Because a student loan is a long term debt, you should work with a company that treats you the way you want to be treated. It is probably best to go with a well-known company over one that has no track record. There seems to be thousands of consolidation companies out there (approximated by the numbers of offers I still receive in my mail), so you should be sure of any company you chose to do business with.

You can always call your college’s financial aid office. They will tell you if they have had any complaints about a specific lender. They can also suggest lenders that are good to work with.

Look at the level of service you receive from a company when you contact it. Do you sit on hold forever? Are you left with unanswered questions? Can you talk with the person, or is there a language barrier? I picked up the phone at my mom’s house and the company was calling to consolidate my sister’s loans. The woman couldn’t even pronounce the word “Sarah”. She thought it spelled “Shawn”. She spelled Sarah’s name, and then said she was offering a great student loan consolidation opportunity. I wouldn’t consolidate with anyone you cannot communicate clearly with.

Don’t spend so much time looking for the best deal that you waste time. Most lenders offer the same deals. Choose a reliable, reputable company and get to writing one check instead of three, four or even five a month.

Source: Martin Lucak,info student loan consolidation

Is A Student Loan Consolidation Or Federal Student Loan Consolidation Right For You?

With the cost of education going through the roof, going to college can be very costly. Many students don’t have thousands of dollars to pay their way through college. This is why so many college students use student loans and federal student loans to get themselves through college. When it comes time to pay back their student loans, it can be a real burden and a distraction from their career.

Today’s career minded students can get help with the burden of having several student loans. One can focus on their chosen career, instead of losing sleep over paying several monthly student loan payments. Student loan consolidation and federal student loan consolidation can be the solution with several benefits.
Tip! Having Simple Loan Payments. By consolidating your student loans, you only have one loan payment per month and one check to write.

How Does Student Loan Consolidation Work?

Here is typically how a student consolidation loan works. When a student first applied for several loans from several different agencies and student loan providers, they each gave a different interest rate and term for paying back the loans.

The idea of student loan consolidation, is to take all the different student loans and put them into one easy convenient loan. You then only have to make one monthly loan payment every month, instead of several loan payments every month over time.

This saves the student both time and money. Having a lower interest rate and less checks to write every month are a couple of the many benefits of doing a student loan consolidation or federal student loan consolidation.

What About Federal Student Loan Consolidation?

There are several advantages when you get a federal student loan consolidation. You can take advantage of fixed interest rates, lower monthly payments, one payment each month, get payment incentives and new or renewed deferments.

There is usually not a minimum loan balance required with this type of loan program. Also, you have the option of which loans you may want to include and money saving payment incentive plans with some federal student loan consolidation programs.

Another benefit is that you can consolidate your undergraduate loans if you are still in graduate school. You can decide on what loans you want to consolidate from the loans that qualify.

However, federal student consolidation loans can’t include loans you may have received from banks, credit unions, personal loans, consumer debt loans or any other type of financial service loans you may have applied for in the past. They have to be federal student loans to qualify.

8 Helpful Benefits From Student Loan Consolidation

1. Lower Monthly Payments. Depending on your student loan situation and the type of lender you choose, you may be able to lower your monthly payments by up to 50%

2. Having Simple Loan Payments. By consolidating your student loans, you only have one loan payment per month and one check to write. This is very beneficial if you are writing several checks every month to multiple lenders.

3. Having Fixed Interest Rates. With some federal consolidation loans you can have a fixed rate for the life of your student loan. It’s best to do research to see what the best interest rates and term you are eligible for. You can check online to calculate the interest rate on a new student consolidation loan based on the rates of your current student loans. You can then round up to the nearest 1/8th of a percent of the weighted average of the interest rates on your eligible student loans.

4. Extending Your Payment Period. You may have a lot of student loan debt. With federal consolidation loans you may be able to extend the payment term up to 30 years. It’s a good idea to realize you will end up paying more interest over the life of your student loan consolidation. The idea is to get some leverage until your career takes off. You can focus on making money instead of several monthly loan payments.

5. In School Consolidation Programs. While still in school, eligible students can lock in a low rate. This would put you into repayment status, but since you are still in school, you are automatically put into deferment. The drawback of consolidating your loans while in school, is that you lose your 6 month grace period. The solution to this would be to request forbearance for up to 1 year on your student loan consolidation. Here again you can do some research and get more information online.

6. Lower Interest Rate. Student loan consolidation can save you thousands of dollars. You may be using credit cards with 12% to 28% interest trying to keep up with your bills. This can cost you thousands of dollars when you pay the minimum monthly payments on high interest credit card debt. Having a student loan consolidation may be your best option if you can get lower interest rates when consolidating your student loans.

7. New Interest Rates. With a new student loan consolidation, you may be able to get a much better interest rate. Interest rates are now at an all time low. You may have been paying on debt you built up from several years ago, at high interest rates. Things change over time in the financial industry.

8. Help Relieve Stress. With a student loan consolidation you don’t have to worry about several monthly loan payments and due dates. This in itself, can make a student loan consolidation worth your while. You can focus on your new career, instead of those nagging loan payments every month.

Student Loan Consolidation Services And Resources Online To Help You

You can get a student loan consolidation online quickly and easily. The Internet makes research and finding good consolidation loan programs. You can get done in a day, what used to take several weeks. You can learn everything you need to know from information sites that provide the latest news, resources, tools and data in regards to student loan consolidation and federal student loan consolidation.

With knowledge you can be empowered to get the best type of program for student loan consolidation. You can get loan quotes, rates and compare loan companies that are competing for your business.

Source : Dean Shainin, student loan consolidation tips

Consolidating Student Loan

An Introduction to Student Loan Consolidation

As you graduate and start to think about paying off your student loans, you first need to realize that you have options. One of them is referred to as loan consolidation, which, you may discover makes perfect sense for your financial situation. Or, after checking out the pros and cons, and examining your future career and life plans, loan consolidation may not be right for you at this point. The important thing, however, is that you are thinking about your future, comparing the different types of consolidation options available, and determining what makes sense for you. Given the time, work and money you've put into your education, this is a smart move.

What is Consolidation?

Though the loan consolidation process and its terminology can be complex and confusing, the basic concept is easy to understand: You take all of your outstanding federal student loans (even if it's just one loan) and bundle them into one new student loan with one monthly payment. The new rate is fixed-meaning it won't change-and the length of the loan can be extended all the way up to 30 years, which can lower the amount of your monthly payments. It's a kind of refinancing of your federal student loans.

The stress and hassle of having multiple student loans have led many to seek out student loan consolidation. The process can be a bit confusing so here are a few things to remember.

Identify which type of loan you have.

The type of loan you have, federal or private, will determine what type of interest rate you will receive should you choose to consolidate. Federal loans have government backing so they usually carry a lower interest than an unsecured private loan. Because of these differences, never consolidate the two types of loans together; you could be cheating yourself out of the lowest possible interest rate and would be losing the benefits that each loan has to offer. If you have both federal and private loans consolidate the loans by type.

Understand the Timeline

Consolidation of your federal loans cannot begin unless you are actively repaying your loan, are in the “grace” period, or have dropped below half-time status. For private loans you may not have these stipulations. Know where you stand in this regard so you can get started with consolidation as soon as possible.

You Only Get One Shot at the Rate.

The interest rate you have when you first consolidate your student loan is the rate you keep. If in the future you refinance because of cleared loans the rate will stay the same.

If you have a considerable amount of loan debt, consolidation may be for you. Streamlining your school debt through student loan consolidation can save you time and money.


Why might I consolidate?

The main reasons to consider student loan consolidation are:

• Potential for lower monthly payments
• Fixed interest rate
• Only write one check for various loans
• Potentially flexible payments during hard times

Depending on your circumstances, these may or may not be that interesting to you. If you’re not worried about rising interest rates, for example, then you might not care about getting a fixed rate. Likewise, if you’re making your payments without any difficulty, you might have no need for lower payments.

Source: Justin Pritchard,About.com; ABC Loan Guide; SimpleTuition