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13:43
Sajid Ali
Student loan consolidation is an effective and convenient debt management strategy highly beneficial for students who have defaulted with the student loan repayments and are willing to get their credit history back on track. However, student loan consolidation is always the last option to be considered when a student is trying for debt clearance.
Listed below are certain facts that one has to take into consideration before opting for student loan consolidated.
Consultation with the financial-aid office: Various student loan programs have interesting options for debt clearance. For example, in case of Perkins Loans, one can reduce the loan amount by doing some community service for certain number of hours. Also, physically challenged students have separate concessions. All this information is available with the financial-aid officer in your school. One needs to have a financial counseling with the officer before opting for consolidation.
Taking advantage of the grace period: Federal loan programs such as Stafford Loans offer a 6-month grace period to students who have just graduated from the school. Within this period, the student is expected to get employed and become financially independent so as to start the loan repayment process. According to market experts, this is the right time to apply for a student loan consolidation. Interest rates are really low during this period. Once the grace period ends, interest rates are determined based on the income of the student.
Never combine federal student loans with private loans: One should never combine private loans like credit card debt and car loans with federal student loans while opting for loan consolidation. Private loans come at a higher interest rate and do not carry the same type of benefits like a federal loan. Hence, consolidating a private loan with a federal loan would increase the overall interest on the loan.
Lender initiatives: With the objective of wooing customers and also to withstand competition in the market, lenders offer attractive loan packages. It is important to take advantage of these lender initiatives. Information about these initiatives can be obtained by shopping around and getting quotes from multiple lenders.
Listed below are certain facts that one has to take into consideration before opting for student loan consolidated.
Consultation with the financial-aid office: Various student loan programs have interesting options for debt clearance. For example, in case of Perkins Loans, one can reduce the loan amount by doing some community service for certain number of hours. Also, physically challenged students have separate concessions. All this information is available with the financial-aid officer in your school. One needs to have a financial counseling with the officer before opting for consolidation.
Taking advantage of the grace period: Federal loan programs such as Stafford Loans offer a 6-month grace period to students who have just graduated from the school. Within this period, the student is expected to get employed and become financially independent so as to start the loan repayment process. According to market experts, this is the right time to apply for a student loan consolidation. Interest rates are really low during this period. Once the grace period ends, interest rates are determined based on the income of the student.
Never combine federal student loans with private loans: One should never combine private loans like credit card debt and car loans with federal student loans while opting for loan consolidation. Private loans come at a higher interest rate and do not carry the same type of benefits like a federal loan. Hence, consolidating a private loan with a federal loan would increase the overall interest on the loan.
Lender initiatives: With the objective of wooing customers and also to withstand competition in the market, lenders offer attractive loan packages. It is important to take advantage of these lender initiatives. Information about these initiatives can be obtained by shopping around and getting quotes from multiple lenders.
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