Student loans are such a pain. Of course they give you the opportunity to get
a degree that you wanted, but then the time comes when your mail box is flooded
with bills from several lenders and you are ready to scream. Luckily for you there
is something you can do to make it less of a hassle. Applying for a student loan
consolidation program will greatly benefit you. Find out how to consolidate your
student loans the right way.
Why consolidate?
First, you will be paying off one loan instead of several. It is much more
convenient; you will receive one bill every month and won't have to worry about
missing a payment and being slapped with late fees. Also paying some of your
bills late can hurt your credit history. Consolidating all your student loans
into one will help you avoid this.
Second, loan consolidation can save you a lot. The goal of consolidation is
to let you make lower monthly payments. The interest rates are also lower, than
on the loans before consolidation. This is very important when you are just
starting a new career. Saving on your student loan payments will leave you with
extra cash for other important things.
Does bad credit prevent you from applying for loan consolidation?
If you have a bad credit history, it usually won't prevent you from being approved
for federal loan consolidation program. With private lenders bad credit score
can be a bit of a problem. So if you have any federal loans, consolidate them
first. Then make sure that you take care of your monthly payments before their
due dates. This will improve your credit score, and you won't have any troubles
consolidating with a private lender. It will also help you get discounts to
save even more.
How to find the best consolidation student loan rate?
The rate shouldn't concern you because according to the federal law, all private
lenders have to offer exactly same rate as FFELP (Federal Family Education Loan
Program). Your individual rate will depend on the average rate off all outstanding
student loans you currently have.
Some lenders advertise very low rates. But you have to bear in mind that most
lenders offer certain benefits and discounts, and the rate advertised is usually
what you get after a discount is applied. So if you are not eligible for the
discount, your rate will be higher.
Most companies clearly state discount eligibility criteria, for example always
making your payments on time or setting an automatic withdrawal from you account.
But there can be other criteria as well, not mentioned until you actually apply
for consolidation with this lender. So the only reliable way to find the best
deal is to ask for quotes from several banks and other private lenders and compare
them.
Another thing young graduates have to be aware of is hidden fees. When you
apply for a federal loan consolidation program there will be no additional fees.
Many private lenders also don't have any fees. However, some lenders charge
you additionally for consolidation, so you will have to ask if there are any
additional fees.
Finding the best deal on your student loan consolidation program might take
a bit of research, but since we are talking about thousands of dollars, savings
can be substantial too. The easiest way to get your quotes is to visit lenders
websites and ask for a quote online. And remember, you are allowed to consolidate
your loans only once, so it is important to make the right choice the first
time.
Tanya Turner is a publisher of
Loan Consolidation Guide, where you can compare consolidation offers by several lenders. The Guide also offers tips and advice on how to save the most when consolidating your loans.
