Student
Loan Consolidation Information
If you are still trying to decide
whether or not college student loan consolidation is right for
you, you may need to gather more information and learn all the
facts before you can make an informed decision. Not knowing all
the facts could lead you into making the wrong decision which
may well cause you to end up paying a higher interest on
your debt.
The following commonly asked questions
and answers on student loan consolidation information will
provide you with some tips and advices:
What types of
loans can be
consolidated?
- Stafford Loans -
Subsidized and Unsubsidized
- Federal Direct
Stafford Loans - Subsidized and
Unsubsidized
- HEAL/HPSL
Student Loans
- Parent PLUS
Loans
- Federal Direct
Parent PLUS Loans
- Federal
Consolidation Loans
- Federal Direct
Consolidation Loans
- Perkins
Loans
- Nursing School
Loans and more...
- Private Student
Loans
-
Who Can
Consolidate?
Both
student and parent borrowers can consolidate their education
loans but this has to be done seperately. They cannot combine
their loans since only loans from the same borrower can be
consolidated.
When can you consolidate
your student loans?
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.
Are there any minimum
balances required to
consolidate?
For private student loans consolidation,
there is usually a minmum amount of $7,500 but some
lenders may allow you to consolidate with just $5,000 in
loans. As for the federal direct student loans
consolidation, there is no minimum
requirement.
How Do I go about consolidating
my student loans?
You are free to look for any lenders for
your student loans consolidation but it's wise to start
off with your original lender and use them as the
baseline for comparison with other lenders. The paper
work involved in consolidation of your student loans are
minimal and many offered online registration.
I have only one loan, can I still
consolidate?
Yes, you can still consolidate a single
loan provided that loan is not already consolidated. You
can only re-consolidate a consolidated loan provided
you include additional loans to it.
Can I consolidate my federal
direct student loans with my private student
loans?
No, you can consolidate both federal direct
student loans and private student loans together but you
can however, consolidate them seperately. It's alos not
advisable to consolidate them together as feredal direct
student loans usually comes with a lower interest rate.
You'll end up with a higer interest rate if you were to
combine both together. Moreover, you will also lose
several important benefits of the federal education
loans, such as flexible repayment terms and generous loan
forgiveness and cancellation provisions.
Are there any fees to
consolidate?
There is
no cost
involved for
consolidating your federal
direct students loans
but there may
be an origination fee
ranging from 0%-5% depending on your credit score on
consolidating your private student
loans.
How are the interest rates
calculated?
Private student loan interest rates are
calculated based on a published index such as the Prime
Rate or LIBOR (London Inter Bank Offering Rate) plus a
margin based on your credit score and credit history. If
a cosigner is required, your interest rate will be
determined based on your credit, and your cosigners'
credit.
Because the interest rate is variable, it
will fluctuate over time. Interest begins accruing when the
loan is disbursed.
For Federal direct student loans, the
interest rate is fixed and is calculated as the weighted
average of the interest rates of the loans being consolidated,
assigning relative weights according to the amounts borrowed,
rounded up to the nearest 0.125%, and capped at
8.25%.
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