Sunday, August 23, 2009

A Brief Intro of Student Loan Consolidation

Many University or College students find themselves in a tough position because they cannot pay their loans and other outstanding loans with interest rates. A student loan consolidation allows you to incorporate everything into one single loan with only a single monthly payment. The rate is an average interest rate of your flexible loan rates. There are many advantages of obtaining a consolidation, such as allowing you to pay only one monthly payment at a lower amount for a longer time. Depending on your loan, student loan consolidation can be repaid up to 20 or 30 years.

It is important to know what types of loans are eligible for a consolidation. Here are some examples that are eligible: subsidized/unsubsidized federal student loans, federal direct lending student loans, federally insured loans for students, Federal supplementary loans for students and students' loan for health education assistance. These are only a few of the options, there are many more available. If you want to find out what other loans can be added to your student loan consolidation you should contact the Direct Loan Origination Center's Consolidation Department. If you took a loan from FFEL (Federal Family Education Loan) program, you should contact a FFEL lender for more information

A helpful fact you should take note of is that student loan consolidation can be obtained even after you graduate, leave school, or drop below half-time enrollment. For undergraduates, half-time enrollment is generally 6 credits. For graduates, half-time enrollments are 3 credits. You can even obtain a student loan consolidation when you are in school. However, to be eligible for a student loan consolidation during school, you must currently have at least a FFEL loan or one Direct Loan during the school period.

You must also follow a few financial criteria in order to be eligible for a consolidation. Forbearance and deferment on all loans are actually being consolidated only if you are in a grace period. Your payment schedule must be on time or satisfactory with your defaulted loan holder and finally, you must agree on an income sensitive payment arrangement on consolidation of your loans.

By Elgin Still

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