Are you considering student loan consolidation?

This isn’t a bad idea at all however you have to know of some factors that you have to consider like the fact that consolidating a private educational debts follows a different process from consolidating a federal credit.

Student loan consolidation can a practical financial decision especially if you have already applied for forbearance or deferment or if you are simply bogged down with multiple private college debts.

What factors should you include when opting to consolidate your private debts?

• The interest rates
• The total monthly payments
• The number of remaining payments
• The lenders
• Your credit history

It helps you make a sound decision if you evaluate your current financial situation and more so if you can get advice from an account manager through a reputable lender. You have to assess yourself if you could be a likely candidate for a private college debt combination.

Different private lenders like Bank of America, Nellie Mae, Citibank and Sallie Mae feature their own brands of college educational loans that they each market. With this in mind, there is no doubt that they also have their own branded debt consolidation terms.

Having several private educational debts allows you to apply for a private college loan consolidation plan. How does this work?

Your consolidation lender will pay off all your debts and then a single payment combining the sum of all your financial responsibilities to the previous lenders and the average interest rates will be issued to you. The new debt will have a revised repayment term, new limit, new lower monthly payment and new life of loan.

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1. When You Consolidate Student Loans, You Can Remove The Co-Signer.

Concerning the private student loans consolidation, it is possible to remove the co-signer after 24 or 48 months of making the regular payments. This will free the parent or the relative from the potential liability.

2. What Is The Lowest Loan Amount?

Most lenders will require a combined sum of $ 5,000 or more for the consolidation for the private debt consolidation and $10,000 for the federal one. You cannot be in a default status with any of your loans. The consolidation process takes about 45 days.

3. You Can Reconsolidate, If You Take An Added Loan.

You cannot reconsolidate the federal and direct debts unless additional loans are included. For example, if you consolidated your federal debts after your undergraduate degree and then wanted to also consolidate your graduate loans, you can combine the new loans with those that were reconsolidated.

4. You Cannot Consolidate Federal And Private Loans Into One Big Loan.

There are natural reasons for this rule. If you go back to school, you cannot defer the private loan consolidation payments, but with the federal loan you can. You have to pay the private loan consolidation even if you have difficult economic situation. You cannot get the tax benefits from the paid interests. And you cannot apply for forgiveness on a private loan consolidation.

If you will pass away, the private loan goes to the next kin, but the federal loans are forgiven. And finally, the private loans have generally the variable interest rates, so you cannot lock the rate during a low rate period.

5. The Need Of The Co-signer.

If you are now a recent graduate or undergraduate, it is possible that your lender will require a co-signer for a private loan consolidation. This also depends on the principles of the lender and on the credit history of the borrower. However, in all cases a co-signer will make it sure that the application will go through.

The student loan consolidation is a typical financial service process, which is full of details and full of opportunities. That is the reason, why it is wise to turn to the expert and really think this issue thoroughly before jumping into some agreement. I would recommend a low monthly payments, because this system will leave room for the sudden changes in the future. And you can always turn to the lender to pay the loan quicker.

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First, for the newest students looking for loans, you have two types of loans: government guaranteed and private student loans. The government guaranteed loans have benefits that the others may, or may not have, such as:

- Preferred interest rates under 8%

This can save you a ton of money. You want to keep that interest rate as low as possible.

- Deferment options

This means you can ask for a delay in payments if you don’t have a job.

- No payment during school

If you go back to school for an advanced degree, you can stop making payments while you study.

Places to look

1. FAFSA.gov

Always check with FAFSA first. This is the main website for college student loan guaranteed by the government. Through this site, you can get Stafford loans, Perkins loans, Grad/PLUS loans, Pell grants, SMART scholarships, and more.

You’ll have to fill out a FAFSA (hence the name) but that’s not that hard. Once you have your FAFSA in, you get a report in about 1-2 weeks of what aid the government will offer you.

This is pretty basic info. Almost all students know about he FAFSA. What next? Where else can you look?

2. Your State

Look up your state website. Usually, you’ll find a link to their higher education office. Go there and see if your state offers loans to students – many do.

Your state may also offer student scholarships, tuition waivers, student loan forgiveness for certain in-demand fields, and even reciprocity if you go to a school in a neighboring state in some cases.

3. Private Student Loans

You can also get a student loan from a private lender, such as a large bank. Be careful with this group of loans. You want to be sure to check to see if you can get a government student loan first, before you go this route.

Check with your financial aid office at your university for college student loan first. If you have no other options, there are many banks that offer these loans. Just call a couple of the biggest. You may need a cosigner.

3 Extra Tips on Student Loans

- Pay Day Lenders do not offer student loans.

Stay away from these companies! They will charge you very high interest and they don’t offer any delays, or deferments while you are in school. Their interest rates are sky high. Don’t use them.

- Sell Your Car. I know, you have to get around, but do you need a new car? Sell it and get a cheap one. If you go about 8 years old, you can get a good car, and keep the price down. Maybe even pay cash or only have one year of payments.

I know it sounds crazy, but you could also ride a bike, walk, take the bus, or even carpool. That car may just be the anchor holding you down.

- Stay Away from Credit Cards.

I know it’s so easy to charge a few groceries. Or charge your textbooks. Or get a quick cash advance. Don’t do it! You don’t want to graduate with a ton of credit card payments.

If you can, always pay cash. Go to a cheaper college or university. Work on the weekends or evenings. Live at home or share. Avoid debt, and finish your degree.

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In order for parents to become eligible for this type of student loan, they must complete the FAFSA, also known as the Free Application for Federal Student Aid. This application takes into account the families adjustable gross income, total assets, and current financial obligations. If the government determines that the parents are eligible to receive the Parent Plus Loan then they will receive a letter outlining the total award amount for the upcoming school year.

If you find yourself not having enough money to pay for school then this loan may be right for you. Parents can borrow up to the amount that is costs for their child to attend school less any other financial aid package. This amount can change for future school terms if the cost of college increases or decreases.

A credit check will be completed for all eligible parents that accept the Parent Loan. This credit check is to make sure that they have a good credit history, since credit history determines your credit worthiness. If you don’t have a high enough credit score then you can have a co-signer, who will be obligate to make any payments that you are unable to make.

Now that the private student loan market has been diminished due to the economic downturn, it’s important to find other forms of student aid. The Parent Plus Loan is a great alternative, since it offers a low interest rate and offers very favorable repayment terms.

For more information related to the Parent Plus Loan, visit http://www.ParentLoan.org & http://www.ParentPlusLoanApplication.com

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