Consolidate Student Loans - Your Guide to Reducing the Burden

By: MauiNick


Student loans backed by the government offer appealing terms such as low interest rates, deferred repayment, subsidized interest payments and longer repayment terms. Your credit score is less toughly reviewed than for other kinds of consumer loans. Whether you are currently enrolled, have graduated, or currently employed, you could save thousands of dollars using a government student loan consolidation by locking in record low interest rates before they rise.

By all means, if you need to lower your monthly student loan payments by extending the amount of time you have to pay your debt, a government student loan consolidation may be the solution for you. With time, your financial obligations will be more manageable. With a government student loan consolidation, the numerous student loans you acquired throughout the years are paid off all at once and replaced by a single fixed rate loan, often with a significantly lower monthly payment. Even if your loans are in default you may still be able to take advantage of a government student loan consolidation.

Government student loans are advantageous over consumer loans. For example, interest on government student loans is tax deductible. These loans can sometimes be forgiven for certain types of service, and you may be able defer payments on the loan if you go back to school.

Because credit isn't an obstruction and collateral is not an issue to secure the loan this opens the doors for millions of people that otherwise could never put together the necessary means to pay for college. On the other hand, private loans don't have these advantages - they are really just loans either secured or unsecured, and you have to pay them back as in the cases of any other loan.

Another advantage of consolidation through the government program is that the term of the loan is often extended to allow students to have an extended period to repay their loans. That means the borrower will make lower monthly payments. Maximum repayment periods for consolidated loans vary from ten to thirty years, depending on the size of the loan. The size of the monthly payments depends on the repayment period, total loan amount, and interest rate.

All students with federal student loans are eligible for government student loan consolidation. However, some requirements must be met in advance. First, the student must have more than one federal student loan. If he or she only have one now, then consolidation is unnecessary. Second, students must be in good standing with their loans. That means the student must either still be in his or her six-month post-graduate grace period or have made three full monthly payments on time for each of the loans being consolidated.

Here are some guidelines. You should not refinance if you are near the end of the term for your student loan. Don't refinance if youíre just saving a few dollars a month - the additional time you are financing will cost you more in the long run. Your objective is to consolidate them into a single loan with rates and terms you can afford.
Pay more frequently than the schedule - you will reduce your overall interest.
Finally, to find out if you will save money, you need to analyze your current interest rates and monthly payments and compare them with the many consolidation services being offered by the government, your local state, and private sources.

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Nick Hurd is the developer of www.consolidationsecrets.com - debt consolidation secrets and has written many articles assisting people to get out from mountains of debt. You will find lots of additional information at Consolidate your bills through debt consolidation You can get out of debt

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