Student loan consolidation can be used by student or parent borrowers to combine their multiple education loans into one loan with one monthly payment. As any student can take either federal or private student loans, he or she can also take a federal or private consolidation loan to make the education debt more manageable.
Both federal and private student loans offer significant benefits, but federal loans offer borrowers many benefits that don’t come with private loans; for instance: low fixed interest rates, income-based repayment plans, loan forgiveness and deferment options. While some private lenders may offer them too, it usually is associated with some strings attached.
For those reasons, every borrower should always exhaust federal student loans options before considering a private loan. The same advice applies to consolidating student loans – always look at federal consolidation loan first and only if you don’t qualify for a federal loan of it is not the right choice for any reason, and then seek a private consolidation loan.
It is important to remember that a federal student consolidation loan can’t include any private loan. Moreover, if you consolidate your federal student loan into a private consolidation loan, you will lose your federal borrower benefits mentioned above (unless you private lender tries hard to get your business and includes them in the offer).
There are important differences between federal and private student loan consolidation.
First of all, with federal student loan consolidation, you will have a fixed interest rate, while private student loan consolidations are credit-based, which means that your consolidation loan rate will not be locked – it will be variable. So, while you will not have to go through credit check in order to apply for a federal consolidation loan, you will need it to secure a private consolidation loan.
Student loan consolidation rates are determined differently for federal and private consolidations. The interest rates for federal loans are set according to a formula established by federal statue. It’s a fixed rate, based on the weighted average of the interest rates on each of your loans at the time you consolidate, rounded up to the nearest 1/8th of a percent and capped at 8.25%.
As private student loans are not funded by the federal government, they are subject to the terms determined by each individual lender (bank, credit union, other financial institution) and the market competition. In private student consolidation loans a borrower’s credit is the primary factor in the variable interest rate offered to the borrower. As the base for setting the consolidation loan interest rate, the private lenders most often use the Prime rate or the 3-month LIBOR Rate, to which they add a margin. That margin varies from lender to lender and is applied according to the borrower’s credit rating.
With regards to the interest rate on the consolidation loan, it’s typical for both federal and private consolidation loan to include 0.25% rate reduction for automated debit payments.
Repayment of federal student consolidation loans begins within 60 days of the disbursement of the loan, with the payback term ranging from 10 to 30 years, depending on the amount of education debt being repaid and on other debts owned, as well as on the repayment option chosen by the borrower. Private student consolidation loans can also have repayment terms of up to 30 years, although they have fewer repayment options. Usually, repayment begins 30 days from the time your private student consolidation loan is funded.
While the most important factors looked at when deciding about how to consolidate student loans are the interest rates, borrower benefits and the terms of repayment, there are also other significant factors, such as: fees or cost to consolidate, prepayment penalties, loan amount limits, customer service, etc.
There are no fees or application costs whatsoever for processing and providing a federal student consolidation loan. It’s against the law to ask for advance (up-front) fees for arranging a federal education loan or consolidating federal education loans. However, some federal education loans (e.g. the Stafford and PLUS Loans) may require some fees, but they are always deducted from the disbursement check. On the other hand, private lenders may charge fees for application and processing private consolidation loans. Some private lenders charge fees as high as 4% of the principal you owe.
Federal consolidation loan programs don’t require a minimum balance to consolidate student loans; some private lenders require a minimum balance before they consider a borrower’s application for consolidation. That amount varies from lender to lender, but usually is between $5,000-$7,500 in US-issued private education loans.
With both federal private consolidations, there are no penalties for prepayment – all payments in excess of scheduled payments will go directly to principal and that will help to repay your consolidation loan faster.
The application process for consolidation of private student loans differs from the federal consolidation. Sometimes applications for private consolidation loans may be easier to complete (often done online or over the phone). However, it’s worth remembering that federal loans usually have lower interest rates, borrower benefits and better repayment terms than private student loans. Moreover, federal applications for both original loans and consolidation loans require FAFSA, so with the federal consolidation, your application is already partly completed.
Watch the video related to consolidate
www.realcase.com A debt consolidation loan is a helpful tool, to many people. Using it correctly is a must though. Because it is a loan, you’re taking on a new line of credit. Misuse it and you could add more debt to the load you already have. Use it correctly and you could save money,…
Help answer the question about consolidate
How do you consolidate credit card debt if you do not own a home?I owe about $12,000 in credit card debt and I wanted to make that my year's goal to pay it off, but a lot of the websites I find require that you own a home, or charge a huge interest for someone to "negotiate" with your creditors to bring down interest. Does anyone know of a good resource where I can just consolidate the debt and make one reasonable payment?
Student Aid Lending has been really really awsome to work with in the past.
Their web page is http://www.studentaidlending.com
Their customer service ROCKS and they were really cool about teaching me everything I needed to know about my loans.
Feel free to email me if you want me to get you in contact with them (toryforpresident@yahoo.com) or give them a call, their #'s on the web page and tell them Tory Davidson referred you.
Ask for Crystal- she's the best!!!!!!
ps. you can use these guys even if your loans are from Sallie Mae. It doesn't matter who your original lender(s) are.
Total up how much you owe, then determine if you can get a loan from one source to cover all of the outstanding balances. Take out the loan, pay off all other bills, and you will only have one payment.
If you own a home, a home equity loan, if you have equity, might give you a tax deduction as well.
Then tear up or cut up all of your credit cards and charge cards except the one with the lowest line of credit. It is helpful to have one credit card for emergencies, car rentals, airline tickets.
You can't consolidate private loans with federal ones. Sorry. Your rates will be higher than what you are paying on that federal loan anyway. It is not in your best interest to consolidate for that reason. Just put your payments on auto draft so you don't have to worry about making 3 payments. Most of the lenders will give you a break in interest if you do this.
Good luck.
How about if you don’t have 7or 9G to settle directly with the CC comp.? I think you are better of with a non profit settlement company. I did it now I pay 335 a month to them and that includes their fee of 50 a month even a non profit charges you something. But atleast am not pay theCC 640 a month no calls and hassle of worrying if my interest is going up. And stay the FUCK away from the CC voltures!
You be better off filling for bankruptcy. They might settle with all your debts but your credit card companies dont have obligation to talk to these people. Also if they will settle your account.. IRS will charge you with those accounts they settled as your INCOME..When you enrolled to this.. it will destroy your credit also because you are not making payments. Lastly, bankruptcy will only cost you at least $2,000 dollars for lawyers fee this program.. they will charge you.. at least 5g
@brianedwards35 That make sense.
Put the money you owe on the card with the lowest interest rate.
I would put the MP3's in order by size. That puts exact duplicate files next to each other so you can select a group of them and delete them, knowing you are leaving one on the disk. Search on *.mp3, include sub folders if you have them organized that way and then when the results come up, click on the size column. That will order them by size for you. Scroll through looking at the file names to see exact duplicates.
Select several at a time by clicking while you hold the control key. You can then also click and drag while holding control to add a contiguous group of files to the selection. When you have a bunch selected, right click one of them and choose delete. Remember to empty your recycle bin when you are done.
Good Luck.
this lady doesnt have a clue, shes probably screwed up more peoples lives from this video than helped.
why worry about the stupid Fico score. is it really worth it to live beyond ones means? best remedy of all is to work harder and pay the debt off and never take on more than you can chew.
You can go to a bank for a signature loan. Enough to pay one or two cards. By taking out the loan you may pay 12% interest; and retire a credit card at 23% interest. Make the payoff of your loan over 3 years and place the extra monthly cash against another card, the highest interest payment.
OR Pay the minimum on all your credit cards and the balance into savings. Look for a house, when you find a place you can afford to buy YOUR RENT MONEY WILL WORK FOR YOU. The purpose is credit control not the "castle of your dreams".
It’s so good to be aware…. Thank you!
First of all: You CANNOT settle on a debt and ask your creditor to report it as PAID IN FULL! It will never happen!! I guarantee it! That is essentially lying!!!!! They will NOT DO IT! It will always be reported as settled for less than the full balance. But its ok!! Its better than a charged off account!!! 2nd: Make sure you seek out a non profit debt management agency through CCCS. They do exist! Do your research!!!!
A few points, feel free to challenge:
1. If a person is unable to make even minimum payments, how will they be able to settle with the CC companies? Are the CC companies really going to accept lower payment terms without any guarantee of paying? That would be like extending even more credit to a person who who has already shown that they are completely incapable of paying.
are any financial institutions consolidating right now? i thought all that was put on hold because of the economic worries.
First of all: You CANNOT settle on a debt and ask your creditor to report it as PAID IN FULL! It will never happen!! I guarantee it! That is essentially lying!!!!! They will NOT DO IT! It will always be reported as settled for less than the full balance. But its ok!! Its better than a charged off account!!! 2nd: Make sure you seek out a non profit debt management agency through CCCS. They do exist! Do your research!!!!
If you own a home you could see if you could get a home equity loan to pay everything off, then you only have one payment per month for all of those things rather than say 5. Another option would be a personal loan. Be careful and don't go to a debt consolidation place as most of the time they will damage your credit. If your credit is already damaged and you are looking to repair it, that is a good place to go. Good luck!!
You can transfer all the balances to one card. You CAN'T reduce the payments. Even if you could get a loan somewhere else, your payment will NOT be less than the current total of your credit card minimums.
If you have been out of work for 4 months, you couldn't afford the loan payments even if the payment was less. Until you have an INCOME, ignore the credit cards entirely. Even if they sue, and credit cards will take YEARS to sue, with no income, there is NOTHING for them to take.
You NEED to have an income be the end of the week. McDonald's is a bad LONG term plan, but it is a MUCH better short term plan than what you are doing now.