Consolidating Student-Loan: feared to be gone?
Student loan grantee after graduation is having the fact upon facing the reality that they have to start doing the repayment process and make good on it during the period of six-months after graduation. And one of the most known options is student loan consolidation.
Student Loan consolidation is acquired having the purpose of merging all the multiple bills into one and lowering the interest rates. But lenders nowadays has been hardly offering this kind of option, due to credit crunch has been experiencing. Lenders needed to create new loans to raise funds, for government has reduced the subsidies given to federal loans that lenders have to receive.
But Student loan Consolidation that is feared to be gone is having ways to still avail the program.
- Federal Consolidation. Go directly to federal consolidation. Private lenders will never consolidate student loans anymore. Consolidation of loans could be done in the US Department of Education’s Federal Direct Loan Program. For application just go directly to www.loanconsolidation.ed.gov.
- Private Consolidation. Consolidating federal student loans doesn’t include private student loans. You must be consolidated separately. And only few of the many are now offering private consolidation program. You must posses higher credit scores and income levels to qualify for it. Such qualification is a FICO credit score of 700 or higher, also with the debt-to-income ratio well below 50 percent.
0.25 percent discount is what has been expected upon consolidating one student loan. But before anything else have been done, you must keep in mind that upon consolidating our loan, you are extending the period of repayment from 10 years to 30 years, it is reducing your monthly bill but adding the overall cost. If considerably, it doesn’t make sense upon reducing the interest rates, shop around and find alternative repayment plans.
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