School_Loan_Consolidation

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How To Benefit From a School Loan Consolidation

At the completing your years at school you will undoubtedly have many school loans with various different lenders. Unfortunately you will find that each of the various loans has various interest rates, different repayment amounts and individual payment dates, so it’s probably a wise concept to look into school loan consolidation.

School loan consolidation is simply the process of settling all your existing financial loans by taking out just one new loan. This fresh loan often has a lower interest rate and a longer repayment period resulting in a lower monthly repayment amount, to a solitary lender, and on a single repayment date.

Some point to be aware of is the overall amount you end up paying through your school loan consolidation is often much higher as you are repaying the loan for a longer period of time. To illustrate this let’s work with a simple example as well as assume you had a couple of school loans and your total repayments had been $500 per month for 5 a long time.

That would amount a complete of $500 x 12 times 5 = $30,000

Right now let’s assume that after consolidating the two unique loans into a single new loan, the payment terms for your college loan consolidation are $350 with regard to 10 years (most consolidated loan repayment periods vary from 10 to 30 years, also to illustrate just how much is actually repaid we’ll utilize the lower figure associated with 10 years).

That would total $350 x 12 x 10 = $42,000

So in tangible terms you are spending an extra 40% by bringing together the original loans directly into one new loan with a cheaper monthly repayment and a longer payment period.

When considering school loan consolidation the following point will probably be worth remembering: Do not combine private school lending options and federal colleges loans together in to one loan. Consolidate your entire private loans in to one loan and all your own federal loans in to another loan.

Another level worth considering early on is that school loan consolidation through the grace or deferment duration of the loan, typically allures lower interest rates than if you decide to consolidate your school loans throughout forbearance or when you are actively repaying the lending options. Deciding to consolidate in early stages to take advantage of the low interest rates can save you a great deal of money over the full time period of the loan.

There is a drawback for students who decide in order to consolidate their Stafford loans and that is they will have to start out making repayments usually within 60 days rather than the 6-month grace period they would normally get following graduation.

When considering school loan consolidation, the benefits of less interest rate, a lower repayment amount and only 1 payment date must be balanced against the information that you will almost certainly end up paying a lot more to your education and that the repayments must begin within 60 days.

Comments: 13

  1. Arnoldo June 2, 2013 at 9:00 pm Reply

    Shopping around for Student Loan Consolidation online can become tricky. There are many companies appearing as a direct source yet to find that most of these sites are sending their clients to the same lenders or through a direct student loan consolidation through the Department of Education. I have founds informative sites such as Student Loan Xchange http://www.studentloanxc.com and http://www.e-studentloancosnolidation.com and see that they offer Private and Federal school loan consolidation. Do you know of other reliable companies?

  2. Gabriel June 5, 2013 at 5:20 am Reply

    Right now, the interest rates on my School loans have gone to 8.60%… I know I can get better than that, I have a 746 credti score.

    Has anyone had any good luck with companies for consolidating???
    Can you please post rates and fees with the websites you are familiar with?

    Thanks.
    Posh

  3. Micah August 30, 2013 at 10:33 am Reply

    Can defer my payments and go back to school even though I defaulted?

    I was in school when I found out I was expecting, and the beginning of the pregnancy was very draining so I had to drop out. I want back in to continue my degree. Can anyone give me some advice.
    hm,, I wonder if I can pay off an amount that I owe now and get on a payment plan to continue paying and go back to school.

    I really would like to finish.

  4. Florentino December 20, 2013 at 10:28 am Reply

    I have $60,000+ in combined school loans for my graduate and undergraduate education. I have two subsidized staffords, two unsubsidized staffords, and one previously consolidated loan. My grace period ends in March and I am looking for the best deal to consolidate.

    At a minimum, I am looking for vendors who:
    – do not charge a fee for applying or consolidating with them
    – offer interest discounts for direct debit payment and on-time payments
    – have no prepayment penalties
    – offer interest rates lower than 5.25% which is what I found at Citibank

    Do you have any leads?

  5. Wilburn January 30, 2014 at 5:55 pm Reply

    I have $60,000+ in combined school loans for my graduate and undergraduate education. I have two subsidized staffords, two unsubsidized staffords, and one previously consolidated loan. My grace period ends in March and I am looking for the best deal to consolidate.

    At a minimum, I am looking for vendors who:
    – do not charge a fee for applying or consolidating with them
    – offer interest discounts for direct debit payment and on-time payments
    – have no prepayment penalties
    – offer interest rates lower than 5.25% which is what I found at Citibank

    Do you have any leads?

  6. Rhett January 31, 2014 at 2:22 am Reply

    A close friend is having difficulty affording continuing tertiary study fees.

    The fees must be pre-paid prior course commencement and too little time exists to realistically earn it.
    Previously earmarked funds were wiped out in GFC (Global Financial Crisis) aftermath.
    Increasing unemployment and job position losses make earning opportunities scarce.

    Are there any educational specific loans available for students?
    Do particular personal loans exist?
    For whom do H.E.C.S. schemes apply?
    Do social welfare agencies like Centrelink or Mission Australia offer assistance in this field?
    Are there any pitfalls to be aware of?

  7. Marcelene February 13, 2014 at 5:54 am Reply

    Has anyone gone through a consolidation company for school loans? if so can you recommend one, how does it work, is it work it?

  8. Tamie February 22, 2014 at 1:46 am Reply

    I hear nothing but horror stories about school loan consolidations. My SIL has been paying on them for years and still owes the same amount. (Sally Mae). Where can I go to get a fair shake and a decent rate?

  9. Tiffanie February 22, 2014 at 3:12 am Reply

    Its been about 6 months now since graduating college. How do I go about consolidating and beginning a payment plan on these loans (about 15 grand worth). Do I have any options?
    Thanks!

  10. Dave February 22, 2014 at 7:51 am Reply

    I went to a one year trade school after grants and my money i put into it i owed 11,600.00 Dollars. I consolidated with sallie mae since i got the loans through them and after consolidateing onto a15yr plan i owed a little over 7000.00 in intrest.
    My question i can i go to another company to get the intrest knocked down or illeminated for free.

    Please let me know a website or a phone number because i,ll be paying like 6 years of just intrest. thanx

  11. Dino February 22, 2014 at 7:51 am Reply

    I am in grace period from my recent graduation from school. I have two private school loans and one federal loan.

    SalieMae – $18,500
    Wells Fargo – $25,500
    Direct Loans (federal) – $9,700

    I’m having trouble trying to figure out options to put the loans together and lock in a low interest rate.
    I have a credit score of 802 and scored a job with a salary of $32,000

    My interest rates are variable in the 13% range and monthly payments will be around $770 per month for 15 years starting in January!!

    Do I have options? Has anybody had success consolidating lately?

    Thank you in advance!

  12. William March 15, 2014 at 1:07 am Reply

    So I am going to be going to school to be a helicopter pilot and there are only two companies that I can get student loans through (Federal Loans are not available to this school). I was originally approved for 75k with Penn Security (Through TERI) with Prime+0 interest. TERI filed for Chapter 11 and will no longer fund my loan. Wells Fargo has given me an interest rate of 7.99+Prime on 25k per year. I will need this loan plus a loan from Sallie Mae for 20k as well. My question is can I consolidate after I’m done with school so that my interest rate isn’t as high, because that’s outrageous. I can’t afford to go to school with that high of an interest rate. Please only answer my question and don’t tell me to go to a different school or try another lender. I only have two lending options and I just moved 300 miles to go to this school because I was already approved with Penn.

  13. Hugo March 25, 2014 at 4:22 am Reply

    Or is there a place to help with school loans?

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