Student Loan Consolidation Program
As a student, you may have applied for few student loans in order to pay for your school fees. And after you finish your study and get your degree, you will need to pay back your student loans once you got a job. Different student loans with varied in the rates of interest and also different payment date every month. As a result, it may seem challenging for you to deal with your several student education loans and you will have to worry about any miss payment or late payment that can damage your credit score in your credit report.
If you having such problem, you may consider to get Student Loan Consolidation Program which is a loan repayment program specially designed for college students and also graduates who have several student loans with them and wish to simplify the process of repayment. But, prior for you to sign for any loan consolidation program, it is important for you to know about some basic information related to loan consolidation.
What Can A Student Loan Consolidation Program Does?
The student loan consolidation program enables you to consolidate all your unpaid student loans into a single loan. For instant, in case you got 3 different government student loans, you are able to combine them together to come just one loan. Theoretically, these 3 loans shall be regarded as settled completely and a new loan is going to take place. The primary idea is basically that you’re acquiring a new loan to repay all your unpaid student loans; in other way, it means that rather than for you to pay for 3 different student loans separately, once the loan being consolidated, all you need to do is just pay for one single loan with one payment and due date. By doing so, you will find it is now easy for you to manage your student loan.
Two Different Types Of Government Student Consolidation Loans
In general, there are two types of government student loan consolidation schemes available. The first one is known as direct consolidation loans. If you get the direct consolidation loans you will bypassing any bank or lending companies and will make payments directly to the US government Department of Education.
The second one is the Federal Family Education Loans(FFEL) consolidation loan program. This type of loan scheme works on the new loan company between the original lender and the federal government. Loans that contained in this loan scheme including standard student loans, for example Perkins loans, Stafford loans and PLUS loans.
Nevertheless, several states also provide government student loan consolidation programs which are financed from the state treasuries. They have also been reasonably competitive programs with regards to repayment and interest, generally tailor-fitting the plans to distinctive state or university needs.
For states that don’t have state-funded programs like Arizona, Alaska, Kansas, Mississippi, Nevada, Wyoming, Hawaii, Maryland and Indiana use United Student Aid Funds to be the national guarantor of their government student loan consolidation programs.
Advantages of Direct Consolidation Program
For direct consolidation program, government-subsidized loan interests keep on being subsidized, plus exhausted deferments could possibly be renewed. These types of advantages aren’t available in any other government or private student loan consolidation programs. Private student loan consolidation programs normally add extra fees for consolidating the loans.
Advantages of State Student Loan Consolidation
Appearing a lot more place-specific, state loan consolidation programs are usually more flexible and forgiving. There are many states provide benefits for on time or advanced payments, lowering rates of interest on downsizing amounts or direct withdrawal repayment methods, sometime may include things like deferment choices for qualified students.
In most cases, many states are able to provide you the best options of government student loan consolidation. You should always do your own homework by exploring them for yourself.
The Way A Student Loan Consolidation Program That Can Help You
As a result of getting the student loan consolidation program to combine all your unpaid student loans, you will find out that you are able to benefit from at least 3 advantages:
1. You Can Save Some Money For Yourself
You need to pay interest for any loan you got. Even though typically student loans come with lower rate of interest, but if several loans add up, the interest rate can be enormous for you as well. By using student loan consolidation program to combine all your student loans, you may get a lower interest for your new loan and this will save you some cash on interest. For instant, you have 3 unpaid student loans that you need to pay $200 every month to these 3 separate loan lenders. You will need to pay for a total of $600 each month. However, if you go for loan consolidation by making only one payment per month with extended repayment period, you may only need to pay for $400 per month and with lower interest. This is going to benefit you if you are just graduate and do not make more money with your initial salary.
2. More Convenient on Repayment
With several student loans, you are required to do more paperwork on the payment as well as due dates to keep track. There will be a high chances in which you may overlooked on the payment due date and result in you for making late payment. There will be no more such hassle if you choose the student loan consolidation program with only need to keep track on one record. Therefore, you will need to do less paperwork and less hassle for yourself.
3. More Repayment Possibilities
Applying for student loan consolidation program can even introduce you to more opportunities for you. There’s a chance you’re provided with deferment options and even probabilities of repayment. Such offers can benefit you a lot in case you are planning to further your study, desperate to get a job or having financial difficulties.
In A Nutshell
Taking care of your several student loans are certainly not too difficult but you can even making your life easier and convenient by consolidate all of them with the help of student loan consolidation program. As long as you are signing up for the right student loan consolidation program, you are going to enjoy the benefits it brought to you and you will have more time to focus yourself on your job in order to make more money to pay back the loan in no time.