Consolidation loan

Student Loan consolidation:

Loan consolidation is the channel through which you can bring all your loans under one single policy and reduce the monthly payments by increasing the duration of the loan. Consolidation has loads of benefits, some being:
• Lower rate of interest
• Locking in loans at a lower interest rate
• Lower monthly payments
• Worrying about just one loan instead of many
• Longer repayment schedule

The logic behind consolidation is simple. Consolidation merges all your loans and bills into one single payment. It reduces your (the borrower's) monthly bill of loan repayment. In simpler terms, think of it this way: If you have to pay $100 in 5 years, you pay $20 every year (ignoring any interest component), and if you have to pay the same $100 in 10 years, you pay $10 every year. And in certain cases, the monthly payment burden gets reduced, and the loan payment period also doesn't get increased. This is what consolidation does; it reduces your monthly expenditure on loan repayment and gives you that extra cash in hand.
Now to tell you a little bit more about the Student Consolidation Program. If your loan is eligible to be consolidated under this program (see the list below) then you don't have to worry about variable interest rates anymore. Under the Student Consolidation Program, the interest rates are fixed based on many technicalities such as the amount of loan outstanding, the interest rate currently paid, etc. This rate of interest would be fixed throughout the life of your loan. So no more watching the interest rate markets for fluctuations that can hamper your lifestyle.

The list of loans that can be consolidated under the Student Consolidation Program:
• Unsubsidized Federal Stafford Loans
• Federal Parent Loans for Undergraduate Students (PLUS)
• Federal Supplemental Loans for Students (SLS)
• National Direct Student Loans (NDSL)
• Health Professions Student Loans
• Federal Perkins Loans
• Subsidized Federal Stafford Loans
• All Federal Direct Student Loans (Direct Loans)
• Health Education Assistance Loans (HEAL)
• Nursing Student Loans
• Student Consolidation Loans
• Federally Insured Student Loans (FISL)
• Loan from the Department of Education

If your loan falls under any of the above, then loan consolidation is a realistic option for you.

Federal Loan consolidation:

Federal loan consolidation allows you to consolidate your outstanding federal education loans into a single new loan, even if your loans are currently held by more than one lender and are of different loan types. By consolidating your student loans, you can significantly lower your monthly payments by lengthening the term of your loans and locking in a low fixed interest rate. Most importantly, you can save thousands of dollars during the entire repayment term.

Additional Federal Loan Consolidation Benefits:
• Fixed rates as low as 6.75%
• Extended repayment term with lower monthly payments
• No fees
• No credit checks
• No prepayment penalties
• Seven flexible repayment plans
• Turn several monthly payments into one
• Deferment and forbearance available

Extended repayment term with lower monthly payments

By consolidating your loans you can extend your repayment term up to 30 years, depending upon your loan balance. This has the added benefit of lowering your monthly payments, so you are left with more money in your pocket each month

No credit checks

There are no credit checks whatsoever for a federal loan consolidation. As a matter of fact, consolidating your loans can actually improve your credit rating, as a result of having lower monthly payments. This can actually make it easier for you to qualify for mortgages and other major loans.

No prepayment penalties

Although you have the option of extending your repayment term, you will not be charged any fees or penalties for paying off your loans early. This means that if you take advantage of the low consolidation interest rates, you can save thousands even if you pay down your loan early.

Combine several monthly payments into one

If you are currently making payments to more than one lender, consolidating your loans allows you to eliminate the complications of having to make multiple payments. Instead, you can combine those payments into one easy monthly payment.

Deferment and forbearance available

Loan consolidation is done through the federal loan consolidation program, and thus you retain government benefits such as deferment and forbearance. Like your current federal loans, federal loan consolidations are guaranteed and insured by the federal government.

A deferment is a temporary suspension of loan payments for specific situations such as reenrollment in school, unemployment (up to 3 years only), or economic hardship (up to 3 years only). Forbearance is a temporary postponement or reduction of the payments on your consolidation loan for a period of time due to financial difficulty.


Private Loan consolidation:

Private loan consolidation means combining your outstanding private education loans into one loan, including private loans used to cover educational expenses such as tuition, housing and/or other educational expenses. This is in addition to already consolidated private educational loans. Consolidating your private educational loans allows you to lower your monthly payment significantly by lengthening the term of your loans, while receiving a low variable interest rate. This is possible even if your private educational loans are held by more than one lender or are of different types.

Eligibility:

Eligibility to consolidate private educational loans is based on the following criteria:
 Be at least 21 years old at the time of application
 Have a minimum of $7,500 in US issued private educational loans
 Are in repayment status of private education loans at the time of application
 Have good credit standing Are a US citizen or permanent resident (eligible non US citizen)

Benefits:

Consolidating private educational loans permits several benefits.
 Simple repayment terms
 Low, variable interest rate
 No penalties for prepayment
 One low convenient monthly payment to one lender rather than various monthly payments