Lead A Debt Free Student Life

Lead A Debt Free Student Life, Obtain Debt Consolidation Loans
by: Alex Jonnes

A prompt and timely repayment always keeps you away from falling into a debt trap. But at the time of financial crisis it becomes quite difficult to make all repayments viable especially if you have taken several debts. To overcome this situation a debt consolidation loan would be the best answer for you.

Too many debts always create a problem with your repayments. Debt consolidation loans help you to repay all your existing debts by consolidating them into one. To be more clear, consider this example. Suppose if you have 3 existing debts. Now when you take a debt consolidation loan, you will make repayment for only this loan. All your previous debts will be merged together and will be repaid automatically by the debt consolidation lender. This will help reduce the size of your repayment and you will be bound with only one creditor.

Student debt consolidation loans also offer several benefits. They come with a very low rate of interest and are charged only after you have completed your school and college. There are plenty of rebates also available that you can avail with student debt consolidation loans, Apart from that if you go for this loan, your debt pressure will decrease a lot and you will be able to concentrate on your studies and work.

You will get a student debt consolidation loan mainly from two sources:

• A government agency- These are federal loans offered usually with cheaper interest rate than other sources.

• A federal agency- also known as private student debt consolidation, offer loan to all students who fail to get a government fund.

Student debt consolidation loans are offered to all types of students. As a student, this might be your first loan that you need to repay your tuition fee, boarding fee, travel expense etc. So, you will be offered with a no credit history loan. You will get a student debt consolidation loan also if you have a bad credit history.

The process of student debt consolidation application is as simple as filling any other form. The most ideal and affordable source of application is the internet to which every student is familiar. Internet provides a range of lenders offering student debt consolidation loans. The application form will ask you for certain details about your identity and credit history. Being a student your loan application will be approved quickly without any delay.

But before filling out any form, first research and find the lender offering best loan amount with the lowest interest rates and easy repayments. This way you will get the best deal that will make your financial status good.

About The Author

Alex Jonnes is associated with Easy Debt Consolidations. He is Masters in Business Administration and writes on various finance related topics. To find Student debt consolidation loans, Bad credit debt consolidation loans, Debt consolidation loans, Debt reduction visit http://www.easy-debt-consolidations.co.uk

Student Loans Consolidation Must Known Secrets

Student Loans Consolidation Must Known Secrets
by: Hugo Broadwell

If you have reached your wit's end with your school loans, consider a student loans consolidation. It is a popular means of loan debt consolidation intended to simplify the whole process of repayment. This form of debt consolidation loan also gives you the opportunity to lock in your interest rate for the entire length of your loan. It is no surprise that more students each year are looking into obtaining a student loans consolidation.

Students in the United States will find their student loans are consolidated differently than other types of debt, such as credit card debt. Loans that come from the government, or federal loans, are 100% guaranteed by the U.S. A federal loan is consolidated when a company that handles loan consolidation buys existing loans. The interest rate used for the consolidation is then determined by the year's student loan rate as of May of the current calendar year.

Those who look into student loans consolidation will discover a wide range of potential interest rates. These rates can be as low as 4.7% or as high as 8.25%. Keep an eye on the rise and fall of interest rates, and then act accordingly to strike when the rates are low. You will benefit by having an affordable rate in place during the entire length of repayment of your school loans.

Loan debt consolidation is not an endless road of opportunity. You are allowed to consolidate once with a private lender, and then once more with the Department of Education. You have one chance to get it right, so do your homework. Be sure that you have researched all of the consolidation companies. Make it a priority to find the most reputable companies and the ones that offer the lowest rates.

People often refer to federal student loans consolidation as refinancing, but this is not entirely correct. With this form of loan debt consolidation, your loan rate will not change, regardless of how different your previous loans were. It will merely be set at a fixed rate. Keep in mind that all of your previous loans will be weighed to find an interest rate that is appropriate in light of the current rate. As with all aspects of financial matters, there are a number of elements that will affect the rate at which your interest is compiled.

For the many students struggling with school loans, student loans consolidation remains an appealing option. It is important, however, that students do their financial research, and be aware of the pros and cons of loan debt consolidation. It has its drawbacks: Monthly payments, although combined into one, will be extended over a greater period of time than if the student had not consolidated the loans to begin with. In spite of this, student loans consolidation can be invaluable for students struggling with payments, and its benefits lure more students every year.

About The Author

Hugo Broadwell has an informational website that provides top strategies to profit from Citibank Loans , Government loans, Alaska Student Loans. But that's not all. Start by visiting Hugo Broadwell's site at www.educational-loans-info.com

Instant Student Loans

Instant Student Loans – Quick Funds For Collage Education by James Strom

A student may need monetary support in no time for some urgent expenses. These expenses include not only the educational purposes but others also like purchasing a vehicle for going to collage etc. instant student loans are source of such financial support but it should be availed after careful researching of the options available to the borrower.

The students can find approval of a loan application within hours. This can be ensured through online mode of lending and borrowing. If you make a good search on internet, you will find that plenty of websites are placed there. These websites not only are source of information of various loans available to the students but enable to compare the offers also. Thus after you have compared different such offers to the students from your home, all you need to do is to make an online application to the selected and suitable lender.

Instant student loans are called so because its approval comes within hours. The online application is usually quickly processed by the lenders and the applicants is conveyed of the approval within hours through e-mail or telephonically. Then, generally it does not take much time to have the loan amount in hands.

Even bad credit students can find quick access to these loans through online. But ensure that you have met all the conditions. It would be wise step to take out the loan with a co-signer for easier approval and low rate of interest.

Through instant student loans, you can borrow the money in secured or unsecured option as suits to your circumstances and requirements. While finding these loans from private lenders, make sure that you have assessed your repayment capability and requirements. This way, you will keep away from any build-up of debts in the future. Surely, these loans are easier source of timely finance for collage education but avail it after comparing the offers.


James Strom has done his masters in Finance from Oxford university and is currently assisting Loans Students as a finance advisor. For more information related to instant student loans, student loans, college student loans, student finance, student loans consolidation please visit http://www.loansstudent.org.uk/

Article Source: http://www.articledashboard.com/Article/Instant-Student-Loans-–-Quick-Funds-For-Collage-Education/466965

Alternate Consolidation Loan Student

Alternate Consolidation Loan Student by Foster

Alternate student loan consolidation or more often called private student loan consolidation is the method of consolidating every private or non-federal borrowing for education in a single bill with only one payment in a month. Individuals, who consolidate their debt of private education loan, simplify their monthly finances by lowering their monthly payments of their education loans. The main task of a Federal Loan Consolidation for Students is to improve the credit rating of an individual. However, alternate consolidations have credit based interest rates. Individuals, who opt for federal consolidation to improve the credit rating, receive reasonable interest rates.

Facts and figures related to alternate student consolidation loan

The minimum borrowed sum from such consolidation cannot fall below $10,000 and should not exceed $250,000. If the loan amount exceeds $40,000, the applicant can have a period for repayment of around 25 years. For education loans below $40,000, period for repayment is around 20 years. The rate of interest in an alternate consolidation depends upon the credit rating of the applicant and lies in the range of 0% – 8.25 %. It is also affected by Margin Adjustment index. A consolidation can be performed on loan amounts of two people of the same family or between spouses.

Eligibility criteria and benefits of alternate education consolidation loan

People, who have outstanding debts in non-federal but education-associated expenditures, are Eligible for alternate student consolidation loan. The benefits of an alternative student loan consolidation are as follows:

Formation of a single loan comprising of all private loans for education

Monthly payments of the education loans are reduced

Release of the cosigners after 4 years

Reduction in rate of interests for payments made on time

No penalties prior to payment

Once you apply for an alternate education consolidation loan, the financial distress related to the prevailing loan can be easily removed.


Mary Foster is a Financial Adviser with 10 years as an Accountant. She is the author of Alternate Consolidation Loan Student Weblog at: http://www.69designz.com. Read her latest articles and recommendations to help find a debt free plan that works.

Article Source: http://www.articledashboard.com/Article/Alternate-Consolidation-Loan-Student/283622

Seek Sound Advice Before Consolidating Student Loans

Seek Sound Advice Before Consolidating Student Loans by Dale Z Kacheezey

There's a lot of of college loans procurable for College Students who's searching financial aid to go to a University. A popular college loan consolidation avenue countless students take is through the U.S. Government Federal Loan Program. A Free Application for Federal Student Aid (FAFSA) form must be filled out before a Student can be considered for a particular government student loan. There are also four types of government loans namely, Graduate PLUS Loan, Parent PLUS Loan, Perkins Loan and the Stafford Loan. With inumerable web sites and supposedly experts in the media, it is important that a Student get the best student loan consolidation advice they can procure.

A student financial future may hinge on whether or not they decide to consolidate their student loans. Student loan consolidation simply means the act of obtaining one loan to pay off all the others, thus creating one loan where a Student or the Parents may have had 2 or more loans to pay off. Government student loan consolidation can make a borrower choose from the four repayment procedures like the extended payment plan. Consolidation of student loans generally results in a lower monthly payment with no penalties included for the early paying off of the loan.

In most cases, students and parents will find that there is no credit check required to obtain these Federal consolidation loans. Plus, it's possible that your interest rate will be lower as well. And also, if a government student loan is consolidated its application process will be a lot simpler. Those with Private student loans need to review the pro's and con's of private student loan consolidation before applying.

The lower monthly payment you may receive when consolidating will help ease the burden of paying this loan back. This helps many students get on their feet and obtain a good paying job so that repaying their student loan doesn't put them in in a financial crisis.

One needs to know the pitfalls associated with student loan consolidation. Student loan consolidation is not a good choice for everyone. There are shortcomings to consolidating your college loan, and there are darn few people who will warn you about these dangers, especially the lenders.

Many parents and students fail to act after consolidating their student loans. Meaning that they fail to improve upon their financial circumstances. Consolidation gives you a chance to get on your feet again, but if you go right back into debt or fail to get out and get a good job, you'll likely be right back into a financial crisis when it comes time to start repaying your student loan.

Should you be thinking about consolidating your Federal loan during the six month grace period, think again. Consolidating at this time will result to the loss of the rest of the grace period. Additionally, a consolidated loan means an extended payment plan which can cause a the total amount to be paid back to be raised as time goes on. This can make the total amount of money paid back to increase by thousands of dollars.

Federal student loans are truly a gift for students who are in need of financial aid. However, consolidating it may or may not have a positive effect on your long term financial situation. Smart students and parents will do their due diligence when researching on whether or not to consolidate college loans.


You can get Student Loan Questions answered by visiting the Student Loan Guru. One of the most popular questions asked by Parents and Students is, How Do Student Loans Work. You will get the answer to this and many others questions at the website.

Article Source: http://www.articledashboard.com/Article/Seek-Sound-Advice-Before-Consolidating-Student-Loans/679324

Student loans consolidation – minimizing your strain

Student loans consolidation – minimizing your strain by Casper Wilson

Covering the expenses of higher education is not an easy task these days, when the prices are on cloud 9. You may have opted for a student loan to cover the expenses of your student life. Pursuing education is not that cheap and what normally happens is that students mound up debts. One of the most popular procedures for decreasing student debt is student loan consolidation.

Consolidation means you combine all of your numerous learner credits into one bigger credit. You make one payment on this one large loan, instead of paying on each of your smaller loans every month. If you are under more than one loan, you can merge them into one and can have easier repayment terms. You can always bargain with your lender for affordable interest rates by making regular repayments. The repayment term for this particular financial help ranges from 3years to 30years.

There is an eligibility criterion to apply for these financial aids. The borrower is required to be 18 years of age or above and should be a UK citizen. You are required to show your identity proof, address proof and some of your property documents. Bad credit history like late payments, bankruptcy, missed payments, etc. is not an obstacle in the way of this financial aid. So, if you are a bad credit history holder, no need to worry, as you are applicable for this loan.

The advantage of consolidation is that you will usually pay a lower interest rate than what your previous loans are set at. While you complete a consolidation, you will pay one low interest rate, not numerous different rates. With these advances, borrowers derive several benefits like flexible repayment options, no credit checking of the borrower, and reduction in interest rates if the repayments are made regularly without a failure. The best thing is that student loans consolidation is available online and you can directly apply for it on internet. This helps you getting the approval quickly.


Casper Wilson is presently working with Chance For Loans to provide useful suggestions. You can access information regarding loans. To find student loans consolidation, debt consolidation loans, cheap rates, personal loans that best suits your needs visit http://www.chanceforloans.co.uk/

Article Source: http://www.articledashboard.com/Article/Student-loans-consolidation-–-minimizing-your-strain/847023

Student Consolidation Loans- New Low Rates

Some online lenders are now offering lower interest rates on student consolidation loans. Some of these lenders are offering to take an additional 1.25% off the federal governments already low 7.5%. This could add up to a great savings for anyone who may be considering refinancing their student loans right now.

Loan consolidation is the process of combining multiple student loans into one new loan. Most federal student loans can be consolidated. Fortunately, consolidation can occur while you are still in school, during your grace period, or when repaying your loans. However, you can only consolidate your student loans once. It's crucial to have a thorough understanding of student funding options in order to make smart financial decisions that will inevitably have a long-term impact and benefits. Consumers must choose experienced, trust-worthy loan consolidation specialists that can answer all questions and equip families with up-to-date information on current interest rates, as well as rates over time. Be sure to read all fine print; there are no fees associated with consolidation, go somewhere else if a lender requires fees.

The savings from student loan consolidation means you not only reduce your monthly payments now, but also lock in a low or reduced interest rate for future savings. Simplified, lower payments make it easier to save money and improve your credit score.

Basic federal student loan consolidation offerings include federal Stafford loans and federal Parent Plus loans. These are available to you as a student, or as the parent of a student. Stafford loans allow you to finance your education with federal resources before resorting to private loans. Federal Parent PLUS Loans help finance your child's education and keep your child from having to take out high-variable-rate private loans. The Federal Parent PLUS program is the next step after exhausting Stafford Loan limits.
By consolidating loans, students will be able to ease the pressure on their monthly budget by 10 to 60 per cent reduction in their monthly budget. In fact, students could also save money by using their student loan payment savings to pay off their credit card debts, and consolidation will also help the students' credit scores as well as debt-to-equity ratio.

By shopping for your loan online you can also take advantage of looking around for the options that suit you best. These new rates will probably not last long.

Some of the lenders that are offering these programs are better known for consolidating personal loan debts and credit cards.
http://student-loan-consolidationrebate.blogspot.com/


Article Source: http://www.articlealley.com/article_643822_19.html

Is A Student Loan Consolidation Or Federal Student Loan Consolidation Right For You?

by: Dean Shainin

With the cost of education going through the roof, going to college can be very costly. Many students don’t have thousands of dollars to pay their way through college. This is why so many college students use student loans and federal student loans to get themselves through college. When it comes time to pay back their student loans, it can be a real burden and a distraction from their career.

Today’s career minded students can get help with the burden of having several student loans. One can focus on their chosen career, instead of losing sleep over paying several monthly student loan payments. Student loan consolidation and federal student loan consolidation can be the solution with several benefits.

How Does Student Loan Consolidation Work?

Here is typically how a student consolidation loan works. When a student first applied for several loans from several different agencies and student loan providers, they each gave a different interest rate and term for paying back the loans.

The idea of student loan consolidation, is to take all the different student loans and put them into one easy convenient loan. You then only have to make one monthly loan payment every month, instead of several loan payments every month over time.

This saves the student both time and money. Having a lower interest rate and less checks to write every month are a couple of the many benefits of doing a student loan consolidation or federal student loan consolidation.

What About Federal Student Loan Consolidation?

There are several advantages when you get a federal student loan consolidation. You can take advantage of fixed interest rates, lower monthly payments, one payment each month, get payment incentives and new or renewed deferments.

There is usually not a minimum loan balance required with this type of loan program. Also, you have the option of which loans you may want to include and money saving payment incentive plans with some federal student loan consolidation programs.

Another benefit is that you can consolidate your undergraduate loans if you are still in graduate school. You can decide on what loans you want to consolidate from the loans that qualify.

However, federal student consolidation loans can’t include loans you may have received from banks, credit unions, personal loans, consumer debt loans or any other type of financial service loans you may have applied for in the past. They have to be federal student loans to qualify.

8 Helpful Benefits From Student Loan Consolidation

1. Lower Monthly Payments. Depending on your student loan situation and the type of lender you choose, you may be able to lower your monthly payments by up to 50%

2. Having Simple Loan Payments. By consolidating your student loans, you only have one loan payment per month and one check to write. This is very beneficial if you are writing several checks every month to multiple lenders.

3. Having Fixed Interest Rates. With some federal consolidation loans you can have a fixed rate for the life of your student loan. It’s best to do research to see what the best interest rates and term you are eligible for. You can check online to calculate the interest rate on a new student consolidation loan based on the rates of your current student loans. You can then round up to the nearest 1/8th of a percent of the weighted average of the interest rates on your eligible student loans.

4. Extending Your Payment Period. You may have a lot of student loan debt. With federal consolidation loans you may be able to extend the payment term up to 30 years. It’s a good idea to realize you will end up paying more interest over the life of your student loan consolidation. The idea is to get some leverage until your career takes off. You can focus on making money instead of several monthly loan payments.

5. In School Consolidation Programs. While still in school, eligible students can lock in a low rate. This would put you into repayment status, but since you are still in school, you are automatically put into deferment. The drawback of consolidating your loans while in school, is that you lose your 6 month grace period. The solution to this would be to request forbearance for up to 1 year on your student loan consolidation. Here again you can do some research and get more information online.

6. Lower Interest Rate. Student loan consolidation can save you thousands of dollars. You may be using credit cards with 12% to 28% interest trying to keep up with your bills. This can cost you thousands of dollars when you pay the minimum monthly payments on high interest credit card debt. Having a student loan consolidation may be your best option if you can get lower interest rates when consolidating your student loans.

7. New Interest Rates. With a new student loan consolidation, you may be able to get a much better interest rate. Interest rates are now at an all time low. You may have been paying on debt you built up from several years ago, at high interest rates. Things change over time in the financial industry.

8. Help Relieve Stress. With a student loan consolidation you don’t have to worry about several monthly loan payments and due dates. This in itself, can make a student loan consolidation worth your while. You can focus on your new career, instead of those nagging loan payments every month.

Student Loan Consolidation Services And Resources Online To Help You

You can get a student loan consolidation online quickly and easily. The Internet makes research and finding good consolidation loan programs. You can get done in a day, what used to take several weeks. You can learn everything you need to know from information sites that provide the latest news, resources, tools and data in regards to student loan consolidation and federal student loan consolidation.

With knowledge you can be empowered to get the best type of program for student loan consolidation. You can get loan quotes, rates and compare loan companies that are competing for your business.

Are you in debt?

Are you in debt? For most of us, the answer is a simple "Yes". Whether it's a mortgage, a credit card debt, a student loan, a hire purchase agreement, an overdraft - debt plays a fundamental role in modern life, and very few people can say they have no debt at all.

"Are you in too much debt?" would be a more important question - but it's also much harder to answer. Responding to this question requires a detailed assessment of your finances: not just what you owe, but what you own, what you earn, and how much you need to spend every month on everything from your mortgage/rent to your utility bills, petrol and payments to your unsecured debts.

After all, someone with a £10,000 credit card debt will find it much harder to cope than someone with a £5,000 credit card debt - but only if they're in approximately the same situation. If the first person earns a great deal more and/or has much lower expenses to deal with, they could well be in a better situation to deal with their debt.

If you're wondering whether you're in too much debt, it's good to talk to a debt adviser, who can help you go through your finances and decide whether or not your debts are a problem.

Are you in too much debt?

First of all, it's important to understand the difference between priority debts (from mortgage/rent to utility bills and child maintenance payments) and non-priority debts (everything from credit cards and overdrafts to unsecured loans and store cards).

1) Write down everything you owe - and add it all up.

• Do include all your non-priority debts.

• Don't include your mortgage or any other debt secured on your home.

• Do include any arrears on your priority debts.

• Don't include your latest bills for your priority debts - the ongoing cost of your mortgage/rent, utility bills, etc. is basically a living expense, like food or petrol, so you shouldn't include it in your calculations here.

The figure you end up with is an important figure, but it won't really answer the question until you've compared it with your income (after tax).

If it's less than 3 months' take-home pay, you're probably on top of your debts. Even so:

• it's important not to get complacent, as your debts could grow a lot faster than you realise, and

• it's still worth trying to pay off whatever debt you can, as this will mean you're paying less in interest, and

• your debt could become dangerous if your income dropped, as it would then be larger in comparison with your income.

If it's the same as 3-6 months' take-home pay, then your debts are potentially reaching a dangerous level, so:

• try your best to repay whatever you can, and

• avoid taking out any more credit - at least until you can reduce your total debt so it's less than 3 months' take-home pay.

If it's more than 6 months' take-home pay, then your debts are probably too high, so you should:

• avoid taking out any more credit, and

• focus on repaying your debt.

How can I pay off my debt? If you feel you need to pay off your debt more rapidly than you are doing, it's normally best to focus on the highest-interest debt first, and put as much as you can afford (if possible, your entire disposable income - everything that's left once you've accounted for your living expenses and your payments to all your debts) towards it.

If you'd like some advice on doing this, or on any of the other points in this article, you should talk to a debt adviser.

About the Author

Melanie Taylor is a debt management expert for Think Money. Think Money provide a range of debt solutions including debt management, debt consolidation and IVAs.

Federal Student Debt Consolidation Benefits

Federal Student Debt Consolidation Benefits Are At Hand by Amanda Hash

Federal student loans are subsidized loans that provide financing for college studies. These loans tend to be quite inexpensive but the amounts can be high and thus when the payments are due, sometimes turn out to be unaffordable for those going through financial problems. Fortunately, it is possible to consolidate federal student debt. But, what are the benefits of federal student debt consolidation?

Save Thousands By Locking The Rate

Through Federal Student Debt Consolidation you can lock the interest rate you pay for the money owed and thus avoid increases that often occur when your interest rate is variable. Not only you save thousands of dollars over the whole life of the loan but you will also obtain reductions on the amount of your monthly payments and you will notice it right away as your installments become more affordable.

You can lock the rate as low as 6.5% or even less under the right circumstances and this will imply monthly savings of hundreds and overall savings of several thousands over the whole repayment schedule.

Eliminate Prepayment Penalties

By consolidating your federal student debt into a single federal loan with a locked rate, you will eliminate all prepayment penalties that the old debt may have had. And thus, you will be able to repay your loan at the speed you want. If you want to hasten the pace in order to become debt free sooner you can do so without fearing being overcharged for prepaying your federal student consolidation loan.

Tax Deductions

The interests on your federal student debt consolidation loan are tax deductible and thus you can save a lot of money on taxes. Having a single loan instead of several will simplify the deduction process and make things a lot easier for you when it comes to preparing your tax presentations.

Your Deferment Options Are Renewed

When you consolidate your student debt through a federal student debt consolidation loan you will be able to use deferment and forbearance options again. Thus, if for some reason you can not afford the monthly payments on your student debt when the payments are due, you can request these exemptions to postpone payment till your financial situation improves and you are able to resume the repayment of your federal student consolidation loan.

Obtain A Longer Repayment Program

By Consolidating your federal student debt you will be able to get a longer repayment program. With federal student consolidation you can obtain a repayment schedule of up to 25 years thus reducing your monthly payments and making it easier to afford the loan cancellation. But if you want to become debt free sooner you can reduce the term of the loan to shorter periods (15 years, 10 years, etc.) at your convenience.

As you can see, federal student debt consolidation provides many benefits for students and graduate students that should be considered. Even if you have no problems with your current debt repayment, you can always analyze the possibility of consolidating your student debt and saving money at the same time.


Amanda Hash is an expert financial consultant who specializes in Bad Credit Debt Consolidation and Bad Credit Bankruptcy Loans. By visiting http://www.yourloanservices.com/ you'll learn how to get approved and recover your credit.

Article Source: http://www.articledashboard.com/Article/Federal-Student-Debt-Consolidation-Benefits-Are-At-Hand/730873

Important Note on Student Consolidation Loans

The reason for consolidating a student loan is, most often, a lack of money.

So the question is: Is consolidating your student loan actually going to solve the real problem? While it is a wise thing to do and can possible provide some relief to a stretched monthly budget, it seldom has the effect that most people hope for. It has long been said that there is good debt and there is bad debt. Good debt is debt that brings money in every month, and bad debt is debt that takes money out of your pocket every month. As an illustration, the mortgage on a house that gets rented out and provides some kind of income to the owner is good debt. Student loans, vehicle finance, personal mortgages and whatever else that costs you money every month, is 'bad debt'.

But more to the point: most often, student consolidation loans will not take you any closer to financial freedom and has little effect on a stretched budget. So what is the solution? The real answer to most financial problems is more money. Not money saved by consolidating student loans, but earned money. Particularly passive income. Passive income is income that does not involve your constant participation. Rental income from a property you own would be one of many examples.

There are various avenues to pursue when it comes to passive income. More attention will be given to both passive income and student consolidation loans in following posts. For now, the two most highly recommended resources worth considering are:

Stafford Loan Consolidation

Stafford Loan Consolidation By Vanessa Mchooley

A Stafford Loan, which can help to finance your way through a college or university, comes in two forms:

Subsidized Stafford Loans

A subsidized Stafford Loan, which you can receive based upon your specific financial aid. When a Stafford loan is subsidized, you are not required to pay any interest on the loan while you attend school. The federal government subsidizes the interest accrued on your account while you attend school and does not charge you interest until you finish school.

Unsubsidized Stafford Loans

An unsubsidized Stafford Loan, which you do not receive based upon your own specific financial aid. Rather, you can receive this type of loan but must pay interest on the loan even as you are still taking classes and enrolled in school.

Two Different Stafford Loans?

Often times, college and university students find that Stafford loans will be dispensed to them both as subsidized and unsubsidized loans, meaning that part of the loan will be subsidized and part of it will not. As they move through college, this means that they are paying interest on the loans, or simply allowing the interest to build up over time.

How To Consolidate Your Stafford Loans

Student loan consolidation can help you to combine the two types of loans into one low monthly payment that makes it easier and quicker for you to pay off your college loans. You have the ability to find a loan consolidation company, who will then work with you to take all of your Stafford loans, both subsidized and unsubsidized, and place them into one central loan that can then be paid off over time.

How exactly will this help to save you time and money? For starters, you will only be paying interest on one loan, rather than two, and by consolidating your loans, you can often achieve more favorable interest rates on your debt. In the end, this will allow you to save time, money, and frustration that comes with paying off loans over long periods of time.

This article is distributed by NextStudent. At NextStudent, we believe that getting an education is the best investment you can make, and we're dedicated to helping you pursue your education dreams by making college funding as easy as possible. We invite you to learn more about how to get Stafford Loan

Consolidation at http://www.NextStudent.com.

My goal is to help every student succeed - education is one of the most important things a person can have, so I have made it my personal mission to help every student pay for their education. Aside from that, I am just a pretty average girl from SD.

Article Source: http://EzineArticles.com/?expert=Vanessa_Mchooley
http://EzineArticles.com/?Stafford-Loan-Consolidation&id=20990

Unemployed Student Debt Consolidation Converting Wasteland of Unemployment and Debt

Unemployed Student Debt Consolidation Converting Wasteland of Unemployment and Debt By Scarlette Riley

Oh okay! So you are the one who did not get pay back the loans. And you are the one who is unemployed...Let me get this straight you are an unemployed student with unpaid debts? You are searching for loans? The idea of new loan does not seem such a good idea. You bet it isn’t, unless it is debt consolidation loan for unemployed student.

The cost of education is touching new heights. This has made compulsory for students to take loans. Making repayments is easier said than done especially when student is unemployed. Separate payments on two or more loans are like counting bills all the time without much success. This makes debt consolidation all the more important for unemployed.

Unemployed Student loan consolidation works on similar terms as any ordinary consolidation. Debt consolidation loan will combine various loans into single consolidated loan. This loan takes care of various debts. Unemployed student with one loan to be paid in 5 years and another in 10 years or so will have one debt consolidation loan and instead of different interest rates like fixed on one and variable on another, a single loan structure will decide for all loans.

Depending on the loan amount and availability of collateral unemployed student can apply for secured or unsecured debt consolidation. For smaller amounts that are below £25,000, unemployed can apply for unsecured debt consolidation. No collateral and easy repayments for terms extending from 5-10 years. With secured debt consolidation, unemployed student gets to make use of property like automobile and real estate. Secured debt consolidation enable unemployed student to borrow larger amounts like £25,000-£75,000 and above. Repayment terms for secured unemployed debt consolidation will be 10-30 years. Secured will offer comparatively lower interest rates than unsecured counterpart.

As a rule interest rates are reduced with debt consolidation. Without that debt consolidation makes no sense. An unemployed student needs to carefully see that the cumulative interest rate on different loans is higher than the interest rates on debt consolidation loan. Many debt consolidation hopefuls neglect the interest rates and concentrate on lower monthly payments. Monthly payments extended over longer loan term will always result in lower payments. An unemployed should be careful to carefully calculate the monthly repayments and see you are not paying more. Online tools like loan calculator can help you in doing that.

Debt consolidation for student enables unemployed to fill in for the time when you start earning. Lowering monthly payments will be very helpful especially while you are looking for job. With debt consolidation, a student will see that at least one area has become manageable. One monthly payments payment will seem to end payment chaos. With one lender to deal with, it will keep harassment from other lenders at bay.

Unemployed student will have to search for new loan lender who works advantageously in consolidating loans like education loan, student loan, credit card bills or any utility bills. Searching for a respectable lender for debt consolidation is crucial for an unemployed borrower. High upfront free, high consolidation fee, redemption fee, lender insisting extending loan term - are few of the reasons why you need to look for more lenders. Always ask for quotes and ask questions about things that are not clear to you. And move ahead with lender if you are satisfied. Often unemployed student just stop at interest rates. Look for other debt consolidation policies and interest rates for the entire loan term. Check for discounts and benefits for unemployed student.

An unemployed student should not live under the illusion that debt consolidation will reduce debts. Your debts will remain there; debt consolidation will make it possible for unemployed student to payback these loans.

Students usually have this twin burden of unemployment and loans. Knowing you don’t have the best partners to boast of debt consolidation is a good way to tackle debts while you deal with the other. The person with the worst credit condition can find loans at low interest rates. You are just an unemployed student with a few unpaid debts. Your decision to consolidate can negate debt from having an effect on your progress. This is crucial! Especially when so many things, including your job situation, depend on how well you have performed with debts.

Scarlette started on a horse back and had a few falls herself. Therefore, she knows. Financial decisions are to be made after considerable thought and backed by good financial understanding. Her articles might introduce you to financial sense without any falls. She suffers from no injuries now. To find all types of loans for unemployed UK Residents Please
visit http://www.loansforunemployed.co.uk

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Student Loan Consolidation Centers – Common Options And Facts to Consider

Student Loan Consolidation Centers – Common Options And Facts to Consider By Emanuele Allenti

Student loan consolidation centers should have these 10 common options.

1. Offers minimal rates of interest, presently 1.625 percent fixed interest for the period of the student’s federal loan; at present, the rate being offered by the "Department of Education" is a percentage of 3.37.

2. Through consolidation, a student can cut their payment every month by a maximum of 60 percent using student loan consolidation centers.

3. At the same time during the time of the grace period, there is a maximum of point six percent in interest rate that is deducted for consolidating loans or student credit refinancing.

4. Using auto debit, one can get an added 0.25 percent rate discount with student loan consolidation centers.

5. When a student pays on time for thirty six consecutive payments, he/she then is qualified for a maximum of 1 percent reduction on interest rate.

6. A student gets to keep or maintain all assistance and allowances concerning Federal or State benefits allowed to its borrowers such as delay or deferment and forbearance.

7. Student loan consolidation centers have payment options that are flexible.

8. There are no fees or any other charges or even advance payment or deposit penalties.

9. Does not require that one be checked for his/her credit or that one should have a co-signer.

10. Students having "Federal Direct Loans" are able to consolidate by means of the "Federal Loan Consolidation Program" provided by the government, while still attending school.

7 Student Loan Consolidation Facts to Consider

1. Interest rates for students that are already adults going to college or that they are on their way in their sixth month grace period will increase; Rates previously at 2.77 percent will rise to 4.66 percent starting July 1. Rates will have an increase from 3.37 percent to 5.26 percent for debtors that are paying their loans.

2. Students must only consolidate loans which are variable or changing rates, such as the Stafford Loans, and never fixed-rate loans such as Perkins loans, since Perkins loans are set at a fixed rate, therefore there is no benefit financially and one can unable to acquire loan forgiveness provisions services like nursing or teaching.

3. Student loan consolidation programs are never identical between lenders having fluctuating grace periods, interest rates, late payments penalties, and loan repayment period. Consolidation can bring about loss of certain benefits for example loan deferment and other loan forgiveness alternatives or options.

4. If married and your wife/husband has outstanding student loans as well, you both can opt to merge or bring together consolidation of the loans having an arrangement to repay in any case, of the total loan obligation or any change in the future of your marital status.

5. Student loans that are not paid can be consolidated if reasonable and agreeable payment planning was made between you and your guarantor or lender. Usually, you need to make voluntary and consecutive prompt and punctual payments.

6. When near the completion of your loan repayment, take into account forbearance or deferment when you are in need financially. As student loan consolidation will lower your monthly payments, this also points that extra interest accumulate over the span of the loan and will drastically raise total cost of the loan. To really benefit from consolidation, as much as possible, pay the equivalent monthly payment and always pay ahead of time.

7. To lower your student loan cost and its interest rate, you can opt not to consolidate all your available student loans; you can decide to include unsubsidized loans only or leave out loans with high interest with a low loan balance. Consult and seek advice from your lender student loan consolidation center on which loan options are best and right for you.

Emanuele Allenti offers valuable tips and help about student loans at best student loans and cheap student loans websites. Enter now!

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No-Cost Student Loan Consolidation

No-Cost Student Loan Cons By Vanessa Mchooley

A no-cost student loan consolidation – doesn’t that just sound too good to be true? Think about it. You have just accrued thousands of dollars in debt through student loans after 4 years of college, or possibly even more. Then, a company offers to take all of your loans off of your hands, put them into one central loan, and do it all for free! Well, while it might not be too good to be true, it all depends around your particular situation, which could make this a “free” process, or could still work out to the benefit of the consolidation company that you are working with throughout the process.

How A Student Loan Consolidation Works

Here is how the student loan consolidation works. You have used up thousands of dollars in student loans to pay your way through college, obtain housing throughout college, and pay for other odds-and-ends while attending college. A student loan consolidation then takes all these different loans, pays for each of them, at which time you then pay the student loan consolidation company for the total amount of loans taken out during college.

Example of Student Loan Consolidation

If you were to have outstanding loans of $5000 to one company, $6000 to another, and $9000 to a third, the student loan consolidation allows you to owe $20000 to one company, rather than to three. This can save you money in the long run, as these companies also may be able to offer you a competitive interest rate, which means you will be paying less overall for your student loans in a shorter amount of time and to only one company.

Potential Student Loan Consolidation Problems

Problems can occur with student loan consolidations if you catch a deal that does not work out favorably to your situation. For instance, if you choose a no-cost student loan consolidation that does not offer you a low interest rate, you could actually end up paying them more than you originally would have! It is important that you choose a company not for their “no-cost” approach, but for their willingness to get your student loans paid off with a consolidation that promotes a quick pay-off with minimal interest rates.

This article is distributed by NextStudent. At NextStudent, we believe that getting an education is the best investment you can make, and we're dedicated to helping you pursue your education dreams by making college funding as easy as possible. We invite you to learn more about how to get No-Cost Student Loan Consolidation at www.NextStudent.com .

My goal is to help every student succeed - education is one of the most important things a person can have, so I have made it my personal mission to help every student pay for their education. Aside from that, I am just a pretty average girl from SD.

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The Consolidation of Student Loans

Student Loan Consolidation Programs By Mark C Brown

The Consolidation of Student Loans

With the rising cost of education programs for consolidating loans offer the best of options to manage their finances and repay the amounts in time. There are basically two kinds of programs.

• Federal Student Loan Program
• Private Student Loan Program

Both federal and private loans cannot be consolidated together due to the fact that the rates and terms of these two loans are not comparable. Government as well as private agencies offer to consolidate student loans. Choosing the right program, that will suit their requirement lies in the hands of the student.

Federal Loan Consolidation Program

Consolidating all your federal student loans into one single liability helps you manage your finance. Monthly repayment flexibility and reduction in interest rates are the two immediate benefits.. The repayment flexibility is offered by extending the repayment period/ term depending on your income and the amount of loan borrowed. Consolidating federal loans during grace period offers reduced interest rates.

Private Loan Consolidation Program

The procedure is the same as federal program except that rates and the terms of the program are more expensive and less flexible than the federal program.

Programs for Consolidating Student Loan

Two factors determine the success of a single liability program they are interest and repayment terms. While interest rates are comparatively lower which reduces the cost of borrowing, the repayment options determine the feasibility of the loan consolidation. Different options are broadly divided as follows

• Equal Payments - This plan notifies the equated monthly installments throughout the loan period
• Extended Equal Payments - A 30 year repayment period for the loan taken

Improving your Credit Score with Student Loan Consolidation Program

The single loan program provides finance to both pay off your existing debt and for your immediate financial commitments. No borrowing and prompt repayment of existing loan results in improving your credit score. Positive credit score leads to reduced interest rates.

Mark C Brown

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How to Consolidate Student Loans

How to Consolidate Student Loans - Federal Student Consolidation Loans by Ricky Lim

By using a federal student loan consolidation program, student loan holders can consolidate their existing educational loans. The procedure is very simple: you just have to call the Direct Loan Servicing Center (a division of the U.S. Department of Education) and in a very short period of time, you'll have your new consolidation loan.
The new interest rate will be a weighted average of the interest rates of all your current federal student loans.
It is even possible to consolidate additional debt into this loan if this is considered to be a viable alternative.
The main reason that leads people to ask for debt consolidation is the huge sum of money spent on monthly payments. If you mix all the loans into a single one, your new monthly payment will become very affordable, not to mention that the loan can stretch for a few more years.
In order to do that, you can go to the bank and ask for a personal loan. It's recommended that you use a separate loan for the student loans and another one for the rest of the debts.
Financial experts don't encourage the combination of student loans using a privately funded debt consolidation loan because that will only create more financial problems.
In most cases of federal student loans, the interest is tax deductible. Why would anyone give up such a benefit? In this situation, having two loans is better than having a single one.
The only exception is when the consolidation loan is actually home equity loan. If you're lucky you can obtain an interest rate lower that the one from your student loan.
Home equity loans are also tax deductible and you won't loose the benefits. In time your income will rise and that affect the interest of writing off the student loan. But, with home equity loan interest, you can continue writing off the amount without any problems.

To sum up all the above, sometimes including a student loan next to other loans into a single one can be viable but there are times when separate loans are simply the best option.

Learn how to consolidate student loans at my site. Discover the top rated student loan consolidation programs online.

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Student Loan Consolidation Comparison

College Consolidation Loans - Student Loan Consolidation Comparison by Frank L Froggatt

If you currently have a student loan then you probably know what I am saying when I tell you they are a double edged sword. On the one hand if you didn't get the loan you wouldn't have been able to complete college and have the degree that you now hold. On the other hand, if you didn't get the loan and you didn't have all those payments to make you might be able to pay all of your other bills on time or maybe afford a nicer car, maybe even perhaps live in a nicer house.

If you are truly having difficulty making your payments and even are at risk of losing your good credit standing because of them then you really may want to consider a college consolidation loan.

With this type of loan, just like a standard debt consolidation, you merge all of your high interest loans into a loan with a lower rate of interest that allows you to make one single payment. This really makes life a lot easier and more manageable.

This loan could really be a great solution for you. Especially if you are behind and have tried all of the options of deferment or forbearance that might be offered with your current loans. Many times with a direct student loan consolidation you get a clean slate with your loan. None of the old late payments or problems have bearing anymore.

With the new loan you get to, if needed, take advantage of deferments and forbearance once again. Hopefully though this won't be necessary because you, more often then not, get a lower interest rate which gives you a much lower payment. Another awesome benefit of securing this loan is that your other loans appear on your credit report as being paid off which is great for your score.

With this loan you have basically four different payment plans available for you to choose from.To understand what they are you really need to look at a student loan consolidation comparison so you will know which loan will fit into your needs and budget the best before deciding.

I have provided a student loan consolidation comparison for you on mydebtconsolidationsite.us. If you would like to read this comparison feel free to give my site a visit.

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Student Loans Consolidation Must Known Secrets

Student Loans Consolidation Must Known Secrets
by: Hugo Broadwell

If you have reached your wit's end with your school loans, consider a student loans consolidation. It is a popular means of loan debt consolidation intended to simplify the whole process of repayment. This form of debt consolidation loan also gives you the opportunity to lock in your interest rate for the entire length of your loan. It is no surprise that more students each year are looking into obtaining a student loans consolidation.

Students in the United States will find their student loans are consolidated differently than other types of debt, such as credit card debt. Loans that come from the government, or federal loans, are 100% guaranteed by the U.S. A federal loan is consolidated when a company that handles loan consolidation buys existing loans. The interest rate used for the consolidation is then determined by the year's student loan rate as of May of the current calendar year.

Those who look into student loans consolidation will discover a wide range of potential interest rates. These rates can be as low as 4.7% or as high as 8.25%. Keep an eye on the rise and fall of interest rates, and then act accordingly to strike when the rates are low. You will benefit by having an affordable rate in place during the entire length of repayment of your school loans.

Loan debt consolidation is not an endless road of opportunity. You are allowed to consolidate once with a private lender, and then once more with the Department of Education. You have one chance to get it right, so do your homework. Be sure that you have researched all of the consolidation companies. Make it a priority to find the most reputable companies and the ones that offer the lowest rates.

People often refer to federal student loans consolidation as refinancing, but this is not entirely correct. With this form of loan debt consolidation, your loan rate will not change, regardless of how different your previous loans were. It will merely be set at a fixed rate. Keep in mind that all of your previous loans will be weighed to find an interest rate that is appropriate in light of the current rate. As with all aspects of financial matters, there are a number of elements that will affect the rate at which your interest is compiled.

For the many students struggling with school loans, student loans consolidation remains an appealing option. It is important, however, that students do their financial research, and be aware of the pros and cons of loan debt consolidation. It has its drawbacks: Monthly payments, although combined into one, will be extended over a greater period of time than if the student had not consolidated the loans to begin with. In spite of this, student loans consolidation can be invaluable for students struggling with payments, and its benefits lure more students every year.

Innovative Programs

Student Sponsorships and Education Investments
Private benefactors and investors provide students with funding for their education in exchange for a fixed percentage of the student's future income for a fixed number of years. Many students find these as an attractive alternative to loans.

Early Awareness Initiatives
Early awareness initiatives try to increase the number of students pursuing a college education by encouraging them to consider college as a real possibility when they are young. Many lower-income children give up on college when they are very young, as early as the first or second grade. By the time they reach high school and change their minds, they often lack the necessary preparation. Early awareness programs try to stop pipeline leakage when the students are young by encouraging them to aspire to and plan for college. This increases the number of students pursuing challenging courses, the number of students graduating from high school, and the number of students matriculating in college.

Aid for Specific Activities

Contests
Some groups, particularly professional organizations, hold contests that offer cash and other prizes.

Domestic Exchange and Study Abroad Programs
A variety of loans, scholarships, grants and tuition-reduction options are available for students studying abroad, or participating in domestic exchange programs.

Grants
Grants are a form of financial aid, based on need, which you do not have to repay. Numerous private organizations and government agencies offer grants to students in all fields.

Sports Scholarships, Athletic Scholarships and Financial Aid for Student Athletes
Information about sports scholarships and other resources for the student-athlete.

Specific Majors or Courses of Study
Scholarships and awards available to students pursuing specific majors, such as computer science, engineering, journalism, nursing, etc.

Aid for Elementary and Secondary School

Private Elementary and Secondary Schools
Financial aid available to parents of children attending private elementary or secondary schools.

Student Profile-Based Aid

International Students
Sources of financial aid and other useful information for foreign nationals studying in the US.

Canadian Students
Scholarships, loans and other sources of aid for Canadian students, in both Canada and the US.

Students with Disabilities
Resources specific to students with disabilities.

Female Students
Scholarships, grants and other awards intended specifically for female students.

Minority Students
Scholarships, award programs and advice specifically for members of ethnic minorities.

Older and Nontraditional Students
Financial aid information for students age 30 and older.

Jewish Students
Financial aid information for Jewish students.

Gay, Lesbian, Bisexual and Transgendered Students
National, regional and school-specific scholarships for gay, lesbian, bisexual and transgendered students.

Undocumented Students and Illegal Aliens
Financial aid and scholarships for undocumented students and illegal aliens.

Ayuda Financiera del Estudiante en Espanol
Financial aid information and resources in Spanish.

Cancer Scholarships
Scholarships for cancer patients, cancer survivors, children of a cancer patient or survivor, students who lost a parent to cancer, and students pursuing careers in cancer treatment.

Prestigious Scholarships and Fellowships
A list of the most prestigious, competitive and lucrative scholarships and fellowships.

Aid for Graduate and Professional School

Graduate School
Options and tips for funding a postgraduate education.

Business School
Awards and advice specific to MBA students.

Law School
Awards and advice specific to law students.

Medical School
Awards, professional organizations and other resources specific to medical students.

College-Controlled Aid

School Financial Aid Office Web Sites
Look here for information about your school's financial aid policies and procedures, including application deadlines.

Tuition Payment Plans
Tuition payment plans are short-term installment plans that split your tuition into equal monthly payments.

School-Specific Scholarships and Fellowships
Scholarship and fellowship programs offered only at specific schools, including college-controlled merit scholarships.

College Partnerships
Partnerships between certain community colleges and four-year colleges make it easier for students to transfer from a community college into a four-year college. Studying for two years at a community college can save the student a significant amount of money.

Federal and State Government Aid

US Federal Government Aid
Here you'll find information about the various forms of aid available from the federal government.

US State Government Aid
Look here for pointers to state aid programs and residency requirements for in-state tuition.

Section 529 Plans: Prepaid Tuition Plans and College Savings Plans
Section 529 plans are state-sponsored college savings programs. The two major types are Prepaid Tuition Plans, which lock in current tuition rates, and State College Savings Plans, which offer more flexible investing options. Both are useful ways for families to save for their children's college education.

Scholarships for Volunteering and Community Service
Volunteering can not only help the disadvantaged, but it can provide money for your college education. Learn about the National Service Scholarships Program, AmeriCorps, and other awards for community service.

Military Aid
Aid resources for veterans and their dependents and for students interested in pursuing careers in the military.

Education Tax Benefits
Information about the Hope Scholarship and Lifetime Learning tax credits, the deduction for student loan interest, tax treatment of employer education assistance, and other tax benefits for education.

Employer Tuition Assistance
Information about employer education assistance, including the $5,250 exclusion from income, employer-sponsored scholarships and surveys and statistics concerning employer tuition assistance.

Free Scholarship Lotteries

Scholarship Lotteries
Several sites have started giving away scholarships to attract traffic. Look here for a list of the largest free scholarship lotteries.

In addition to the primary sources of financial aid (loans and scholarships), other kinds of aid are available to many students. These other types of aid fall into eight broad categories:

1. Free Scholarship Lotteries
2. Federal and State Government Aid
3. College-Controlled Aid
4. Student Profile-Based Aid
5. Aid for Graduate and Professional School
6. Aid for Elementary and Secondary School
7. Aid for Specific Activities
8. Innovative Programs

For More Information

FinAid has a page of common questions about consolidation.

The numerous student loan loopholes are discussed in depth in other sections of the FinAid site.

FinAid also maintains a list of education lenders who offer federal and private student loans, including consolidation loans.

If your school participates in Direct Lending, you should visit the US Department of Education's Federal Direct Consolidation Loan web site.

Tools for Evaluating Consolidation Options

FinAid's Loan Consolidation Calculator can help you understand the tradeoffs of consolidating your loans. It compares the reduction in the monthly loan payment with the increase in the total interest paid over the lifetime of the loan. It also shows you the interest rate on your consolidation loan.

Despite the switch to fixed interest rates on Stafford and PLUS loans eliminating a key financial incentive to consolidate, there are still several reasons to consolidate your education loans. These include having a single monthly payment, access to alternate repayment plans, the PLUS loan interest rate loophole, and the ability to reset the 3-year clock on deferments and forbearances. But consolidation can cut short the grace period, although the grace period loophole can work around this problem. It is best to avoid consolidating Perkins loans, because you lose several valuable benefits. Beware of extending the term of your loan, as this can increase the total interest paid over the lifetime of the loan; you can stick with standard ten-year repayment.

Before consolidating, always evaluate the benefits provided by the current holder of your loans. The loan discounts offered by originating lenders tend to be superior to those offered by consolidating lenders, since consolidation loans have tighter margins. Also, if you received a fee waiver or rebate from the originating lender, you may have to repay that discount if you consolidate with another lender. It may be possible to get some of the benefits of alternate repayment plans without consolidating, such as extended/graduated repayment with a loan term of up to 25 years and a single monthly payment, if you have more than $30,000 in federal education loan debt accumulated since October 7, 1998 with the lender. (This is due to a little known provision of the Higher Education Act, in section 428(b)(9)(A)(iv), and the regulations at 34 CFR 682.209(a)(6)(ix).)

You can change the repayment schedule on your loan once per year. So consider starting off with standard ten-year repayment on your consolidation loan. You are not required to start off with extended repayment. If you find it difficult to afford the payments, you can always switch to extended repayment later.

Repayment Plans

Consolidation loans provide access to several alternate repayment plans besides standard ten-year repayment. These include extended repayment, graduated repayment, income contingent repayment (Direct Loans only) and income sensitive repayment (FFEL only). If you do not specify the repayment terms, you will receive standard ten-year repayment.

Consolidation loans often reduce the size of the monthly payment by extending the term of the loan beyond the 10-year repayment plan that is standard with federal loans. Depending on the loan amount, the term of the loan can be extended from 12 to 30 years. The reduced monthly payment may make the loan easier to repay for some borrowers. However, by extending the term of a loan the total amount of interest paid over the lifetime of the loan is increased.

In certain circumstances (for example, when one or more of the loans was being repaid in less than 10 years because of minimum payment requirements), a consolidation loan may decrease the monthly payment without extending the overall loan term beyond 10 years. In effect, the shorter-term loan is being extended to 10 years. The total amount of interest paid will increase unless you continue to make the same monthly payment as before, in which case the total amount of interest paid will decrease.

You do not need to pick an alternate repayment plan. We recommend sticking with standard ten-year repayment, because it will save you money. The alternate repayment plans may have lower monthly payments, but this increases the term of the loan and the total interest paid over the lifetime of the loan. See our caveat about extended repayment below.

Which Loans Can be Consolidated?

Any federal education loan can be consolidated. You can even consolidate a single loan. There are, however, a few restrictions on consolidating a consolidation loan.

You can consolidate a consolidation loan only once. In order to reconsolidate an existing consolidation loan, you must add loans that were not previously consolidated to the consolidation loan. You can also consolidate two consolidation loans together. But you cannot consolidate a single consolidation loan by itself. These restrictions have been in effect since early 2006.

Note that when you reconsolidate a consolidation loan, it does not relock the rates on the consolidation loan. The consolidation loan is treated as a fixed rate loan within the weighted average interest rate formula used to calculate the interest rate on the new consolidation loan. Consolidation does not pierce the veil on previous consolidations.

The new restrictions on consolidating a consolidation loan limit your ability to use consolidation to switch lenders. Generally, you will consolidate your loans once, toward the end of the grace period or after the loans enter repayment, and then be locked into that lender for the lifetime of the loan. If you want to preserve your ability to use consolidation in the future to switch lenders, you should exclude one of your loans from the consolidation.

You Can Consolidate with Any Lender

Students and parents can consolidate their loans with any lender, even if all of their loans are with a single lender. (The single holder rule was repealed on June 15, 2006, as part of the Emergency Supplemental Appropriations Act of 2006. Borrowers no longer need to exploit the single holder rule loopholes in order to consolidate with any lender.) Direct Loans can also be consolidated with any lender. This allows you to shop around for a lender that offers a lower rate or better discounts.

Most lenders require a minimum balance before they will consolidate your loans. For example, many lenders will only offer consolidation loans for borrowers with loan balances of at least $7,500. A few lenders will offer consolidation loans for balances of $5,000 or more, and the Federal Direct Consolidation Loan program has no minimum balance for consolidation loans. (Lenders may not discriminate against borrowers who seek consolidation loans on the basis of number/type of student loans, type/category of educational institution, the interest rate on the loans, or the type of repayment schedule sought by the borrower. Lenders are, however, able to discriminate on the basis of the amount of the loans being consolidated, so lenders can set a minimum balance on the loans.)

Who Can Consolidate

Both student and parent borrowers can consolidate their education loans. (Students and parents cannot combine their loans through consolidation, since only loans from the same borrower can be consolidated. But they can consolidate their loans separately.)

Married students are no longer able to consolidate their loans together. This provision was repealed effective July 1, 2006. When married students consolidated their loans together, each spouse became responsible for the full amount of the loan, and the loans could not be separated if the couple got divorced. To avoid such problems in the future, Congress decided to repeal this provision as part of the Higher Education Reconciliation Act of 2005.

Students can only consolidate their education loans during the grace period or after the loans enter repayment. (Loans that are in default but with satisfactory repayment arrangements may also be consolidated.) Students can no longer consolidate while they are still in school. (The early repayment status loophole and the ability of Direct Loan borrowers to consolidate during the in-school period was repealed as part of the Higher Education Reconciliation Act of 2005, effective July 1, 2006.)

Parents, however, can consolidate PLUS loans at any time.

No Cost to Consolidate

Aside from a slight increase in the interest rate on the consolidation loan, there is no cost to consolidate your loans. There are no fees to consolidate.

Under no circumstances pay a fee in advance to get a federal education loan or consolidate your federal education loans. There are no fees to consolidate your loans. While other federal education loans, such as the Stafford and PLUS loans, may charge some fees, the fees are always deducted from the disbursement check. There is never an up front fee. If someone wants you to pay an up front fee, chances are that it is an example of an advance fee loan scam.

Interest Rates

The interest rate on a consolidation loan is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest 1/8 of a percent and capped at 8.25%.

For example, suppose a student has just unsubsidized Stafford Loans originated on or after July 1, 2006. These loans have a fixed interest rate of 6.8%. When they are consolidated by themselves, the consolidation loan will have an interest rate of 6 and 7/8ths of a percent, or 6.875%. So the interest rate increases only slightly.

If the borrower has a mix of loans with different interest rates, the weighted average will be somewhere in between. For example, if the borrower has $5,000 of Perkins Loans (at 5.0%) and $10,000 of unsubsidized Stafford Loans (at 6.8%), the weighted average is

   $5,000 * 5.0% + $10,000 * 6.8%
   ------------------------------ = 6.2%
    $5,000 + $10,000     

This weighted average, 6.2%, is then rounded up to the nearest 1/8th of a percent, yielding a consolidation loan interest rate of 6.25%.

Note that the weighted average does not fundamentally alter the underlying cost of the loan. It preserves the cost structure by including each interest rate to the extent that it applies to part of the overall loan balance. For example, the consolidation loan in the previous paragraph says that of the $15,000 consolidation loan balance, $5,000 will be at 5.0% and $10,000 at 6.8%, yielding an equivalent interest rate of 6.2%.

If you are consolidating loans with different interest rates, the weighted average interest rate will always be in between. Don't be fooled if someone tries to suggest that this will save you money by getting you a lower interest rate. The interest rate may be lower than the highest of your interest rates, but it is also higher than the lowest of your interest rates. More importantly, the amount of interest you pay over the lifetime of the loan will be about the same.

(For the mathematically inclined, there is a slight difference due to the different shapes of amortization curves at each interest rate. In the example given above on a 10 year term, $10,000 at 6.8% has a monthly payment of $115.08 and total interest paid of $3,809.66, $5,000 at 5.0% has a monthly payment of $53.03 and total interest paid of $1,364.03. If you add these, you obtain a total monthly payment of $168.11 and a total interest paid of $5,173.69. Using the weighted average, $15,000 at 6.2% has a monthly payment of $168.04 and a total interest paid of $5,165.01. So using a weighted average yields a very small reduction in the monthly payment (in this case, 7 cents) and in the total interest paid ($8.68) due to a kind of triangle law. Of course, when you consolidate the interest rate is rounded up to the nearest 1/8th of a point, so $15,000 at 6.25% has monthly payments of $168.42 and total interest of $5,210.42, yielding a slight increase. So you pay a tiny bit of a premium for consolidation, due to the rounding up of the interest rate.

The PLUS loan interest rate loophole can reduce the interest rate on 8.5% fixed rate PLUS loans by 0.25% through consolidation.

If you were deferring the interest on an unsubsidized Stafford Loan by capitalizing it, most lenders will add the capitalized interest to principal when you consolidate. (Lenders can capitalize interest at most quarterly, but most capitalize it once when the loans enter repayment or at other loan status changes.)

Student Loan Consolidation

Student Loan Consolidation

Consolidation Loans combine several student or parent loans into one bigger loan from a single lender, which is then used to pay off the balances on the other loans. It is very similar to refinancing a mortgage. Consolidation loans are available for most federal loans, including FFELP (Stafford, PLUS and SLS), FISL, Perkins, Health Professional Student Loans, NSL, HEAL, Guaranteed Student Loans and Direct loans. Some lenders offer private consolidation loans for private education loans as well.

A separate page provides a comparison chart of loan.

Most FFELP lenders are no longer offering consolidation loans because these loans are no longer profitable. Students can still consolidate their loans with the US Department of Education's Federal Direct Loan Consolidation program at loanconsolidation.ed.gov even if their college does not participate in the Direct Loan Program.