With the rising cost of a college education many students are using private student loans to supplement their financing, and these same students face the question of private student loans consolidation after they have graduated. The chances are very good that a graduating college student has acquired several student loans, and consolidation could be a way to help lower their debt.
When a student has multiple private student loans, there is a chance that consolidation is a good idea. Consolidating private student loans reduces the number of monthly service charges that have to be paid from several to just one. If a consolidation loan has a lower interest rate than the multiple loans then that can lower monthly payments, and lower the amount of interest due on the total amount of the loan.
In many cases a student loan consolidation program is available to any student that can either show the credit history necessary to get a consolidation loan, or any student that has the collateral to back up a consolidation loan. A private loan is not backed by the federal government, so the bank will have requirements that will need to be met in order to qualify including income and credit history. While private student consolidation loans carry higher interest rates than federal loans, they can still come in at a reasonable rate normally under 10%. Your actual rate will vary depending on the terms of your loan. You may be able to negotiate an interest rate as low as 5%, or your situation may cause the bank to assign a higher interest rate to your consolidation loan.
By: Matthew Rizos
Archive for December, 2009
Private Student Loans Consolidation – A Lifesaver For Students With Too Many Loans
December 23rd, 2009Simple Path to Getting Your Private Student Loan Now
December 21st, 2009
It costs quite a bit to get an education nowadays. There are so many expenses, including tuition, books, housing, dining and meals, computers, clothing, transportation, and so much more that must be paid for. Although lots of students qualify for federal government grants such as the Pell grant or scholarships that are institution based, there is still a large amount of unmet need for most students.
While taking out federal government loans such as the Stafford or Perkins loan is an option, these programs are needs based and therefore limited to an amount of money that is based on previously formulated guideline. What this means for students is that Perkins and Stafford loans often fall short of the actual needs that students have while attending college.
Easy To Obtain Private Student Loans
Your private student loan does not require that you fill out the Federal Application For Student Aid (FAFSA), and there are no application fees or origination fees, which makes it free to apply for. And unlike federal grant or loan programs, there is no deadlines for filling out an application for a private student loan, which means that you can apply anytime during the year for the money you need, regardless of any other scholarships, grants, or loans that you have taken out as a student.
Although federal government loans have low interest rates and fees, it is a very competitive alternative that also offers very low interest rates and greatly reduced or non-existent fees for students. Another great benefit is that your check will come straight to you and not to the financial aid office of the school you are attending, which means that you do not have to wait to receive your funding once the school has taken out your tuition and other charges.
No Payments Until Graduation
It will not enter the repayment phase until you have completed your education. Most private will enter repayment six to nine months after you have received your final degree. It will begin to accrue interest, however, that you can elect to pay while you are in school or when you begin making payments.
Applying With A Cosigner
Because it is credit based, and as such, your credit report will be pulled by your servicer. Most students, however, have either no credit or slow credit because they do not have an established borrowing history. Some students may have even made mistakes in the past with credit management and thus have blemished or bad credit. It is in these instances that you might have to apply with your parents to receive it.
Your parents or other relatives are excellent cosigners. Since they have established good payment history and have a great payment record, the lender will base your eligibility upon the credit report of your cosigners. In most instances, once it has entered repayment, you can have your cosigner released from liability to repay on your behalf once you have made 48 consecutive payments.
You can find the best approval rates and lowest interest rates by going with an online lender. They also offer the ease of a completely paperless application process that can be completed from the comfort of your home.
By: Jess Peterson
Getting Private Student Loans For 2007
December 20th, 2009
If you are considering options to federal aid for funding your education, one of them is likely to be private student loans. This option provides an additional source of funding for those who are looking for a supplement to federal aid and will enable them to purse their dreams of higher education.
Private student loans have their own advantages. To illustrate, applicants can get loans for more than $20,000 and this usually takes only a few minutes to approve. Another good point, unlike federal aid, is that there are no application deadlines. This means anyone can apply at any time by simply approaching one of the accredited education institution. Furthermore, private aid is awarded on creditworthiness. and not on need-based criteria.
Usually, the interest rate of student loans are fixed and borrowers need not worry about fluctuating rates that would increase the interest payments. Besides this, private college loans offer affordable repayment options comparable to federal student loans.
However, there is a difference between the repayment period for private and federal student loan. The maximum repayment terms for a private loan is currently fixed at 15 years, which is much lesser than the 30 years limit for federal student aid.
On the other hand, private student loan holders forego other vital benefits given by federal loan. To illustrate, if a federal student loan holder becomes disabled or deceased, the loans are forgiven making repayment unnecessary. Private loan holders’ heirs would have to repay the loans in full from the deceased’s estate. Even the disabled and unemployed are still liable for their debt. This is different from federal loan where the federal government provides an alternative to the hardship of unaffordable loan repayment by writing off the entire loan.
As we have seen above, private student loans are only valuable when filling the gap between total college expenses and a borrower’s awarded financial aid. To use private student loans as a substitution to federal aid, rather than a supplement is short-sighted on the part of the borrower. Hence, it is advisable to consider the pros and cons of a private student loan before you make the correct decision.
By: Sky Joe