Federal PLUS Loan Consolidation

poor student — Wed, 28 Oct 2009 21:56:13 +0000

There are two types of PLUS loans. The first is for parents, who can apply for a PLUS loan if they have a child who is still a dependent and enrolled at least half time in an eligible undergraduate program. The second type of PLUS loan is available to graduate students and those seeking a medical or law degree. These students can borrow enough to cover their education expenses as long as they are enrolled at least part time in school.
If you borrowed a PLUS loan and are now having trouble meeting the minimum monthly payments on your loan, you might want to look into a federal PLUS loan consolidation. A federal PLUS loan consolidation is a practical debt management tool that will combine all of the federal student loans you have taken out under one loan. This makes keeping track of your loan much easier, as you will now only make one payment per month, often automatically deducted from your bank account on the due date.
The other reason many borrowers consider a federal PLUS loan consolidation is to lower their payments to a much more feasible amount. Paying just the minimum on several student loans can quickly become a huge financial burden, especially if you’ve got undergraduate loans, or more than one child in school at a time. Federal PLUS loan consolidation allows you to decrease the amount you pay each month – sometimes by up to half – because it stretches out the term of the loan. Interest rates are typically fair on federal PLUS loan consolidation, but you will pay more interest over the term of the loan because of the length. To avoid this, make sure you do not choose a lending company that will penalize you or charge you fees for paying the loan off early, and then try to pay more than the minimum amount due each month if you can. If you do the math, you’ll find that even a small amount of money over the minimum amount due can save you a lot of money in interest fees over the long term.
There are several lending companies that will assist you in federal PLUS loan consolidation. Be sure to research each one carefully before making any decisions, and take some time to shop around for the lowest interest rate.

Federal Student Loan Refinance Options

poor student — Wed, 28 Oct 2009 17:42:52 +0000

If you are feeling a little (or a lot) overwhelmed by your federal student loans, you may find it helpful to know that you might qualify for one of several federal student loan refinance options. The same government agencies that issued the student loans to you before you started college will also help you apply for federal student loan refinance options, but these options are not available to everyone.
Only the following federally backed loans are eligible for federal student loan refinance programs:
•    PLUS Loans
•    Graduate/Professional PLUS Loans
•    Stafford Loans
When looking into federal student loan refinance plans the best decision for your financial future can be relatively simple. Consolidating various federal student loans into one low monthly bill can save a lot of money, as well as time and energy. When you contact a lender about federal student loan refinance, either private lenders or the Department of Education will pay off your esisting loan accounts in exchange for a loan through them with different interest rates. The Department of Education determines the interest rate by taking an average of the interest from all of the loans that are being consolidated. This average is rounded up to the closest eighth of a percent. It is typical for interest rates to be reduced from the rates of the original loans.
Although the interest rates may be much lower, a federal student loan refinance plan means that the term of the loan is lengthened by quite a few years – usually from the original 10 year term to a 30 year term. This is why the monthly payments are so low. While lower payments are probably the most common reason for students to choose federal student loan refinance, they should also be aware that they will pay a lot more in interest over the longer term of the loan. Some of that extra interest may be avoided altogether by paying more than the minimum amount due on the loan, and some of the money paid towards interest on the loan can be deducted each year.
Spend a little time researching the federal student loan refinance options available to you through private lending companies and the government. After careful research, you’re sure to make a well-informed decision about how to best manage your loans.

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Federal PLUS Loan Consolidation

Federal Student Loan Refinance Options