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Student Loan Reconsolidation: Some Facts

poor student — Fri, 13 Nov 2009 20:07:59 +0000

If you’re considering student loan reconsolidation, it’s probably because you have heard that it can save you hundreds of dollars each month on your student loan payments. Well, depending on the total amount you owe, that may be true. However, you should take some time and research student loan consolidation before you make your final decision as to whether it’s the right choice for you. Here are a few general facts about student loan reconsolidation to get you started.
First, and contrary to popular belief, not everyone is eligible for student loan reconsolidation. Most lending companies require a minimum balance, usually around $5,000. And, if you owe less than $10,000, student loan reconsolidation may not be worth it.
Also, if you consolidate federal loans with a private lending company, or combine them with other loans, you will lose any benefits they held. These include grace periods, forbearances, deferments, and payment plans. For these types of loans, it may be better to look into other options to pay down your student loan debt, as you may find them to be much more generous and flexible than those of private consolidation companies.
You should also keep in mind that not all businesses that specialize in student loan consolidation are the same. Read the terms of the loan carefully, and if you don’t understand anything then make sure you ask questions before you sign anything. Look for loans that do not penalize you for prepayment, and that will apply any additional money above the minimum due to the principal of the loan, and not the interest. Also consider a company’s reputation, their experience in the field, their customer service, and how easy their website is to maneuver. Some companies also offer a small reduction in their interest rate if you agree to automatic withdrawal of your minimum monthly payment. It may not seem like much of a decrease, but remember that spread out over several years it could add up to a lot of savings for you.
With a little more research, you’re sure to make the right decision about student loan reconsolidation.

Can You Reconsolidate Student Loans?

poor student — Wed, 04 Nov 2009 20:30:23 +0000

Are you noticing that the current interest rate on student loans is much lower now than it was back when you consolidated your student loans? Are you wondering if it would be at all possible to reconsolidate student loans in order to lock in a lower interest rate and better terms? Well, the short answer is yes. It is possible. But, of course, there are some requirements necessary for getting that “yes” answer from a lending company.
If you want to reconsolidate student loans, start by researching the loans you already have. Make sure you have copies of your latest statements, and obtain a copy of the terms you agreed to during consolidation, as well. Check that there are no penalties or large fees for paying the loan off early, and decide if you still owe enough to make it worthwhile to reconsolidate student loans that you still owe. Also, talk with your current lending company, as they may make you an offer to avoid losing your business.
Next, you should be extremely diligent in your research of any lending company that offers to reconsolidate student loans. It is well worth the extra time and effort it takes to fully understand the company and the terms it is offering you. When you apply to reconsolidate student loans, read all of the fine print very carefully and ask questions. Make sure you understand absolutely everything. If the company is not willing to take the time to answer all of your questions, then move to a different company and start the process over. Depending on the term of the reconsolidation, the company you choose may be in your life for 30 years. That is a long time to be tied to someone who makes you miserable!
Remember that it is risky for a lending company to reconsolidate student loans. It may be much more difficult to get approved for this than it was to consolidate them the first time. For this reason, make sure your credit is in good shape, and if you think you might need a cosigner try to find one before you start the application process to reconsolidate student loans. Remember, you want to prove to the company you choose to do business with that you are a risk worth taking, so be courteous and professional in your dealings with them.

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.