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As any current student will tell you, the cost of attending a decent university in the United States, whether public or private, is astronomical. In the past two decades, the cost of enrollment in college has increased at an alarming rate. Because of this, many students require financial assistance to help pay for their tuition, housing, and textbooks. More often than not, this assistance will come in the form of a subsidized or unsubsidized loan from the U. S. Department of Education. After four to five years, the final balance that a student owes to the government can be upwards of $20,000 and sometimes even reaching six-figures. Many college graduates turn to student loan consolidation to help them manage repayment of these government loans.

Student loan consolidation can be helpful for a variety of reasons. When a student graduates from school, they have six months before they must start paying on their loans. The amount due on each one is divided into monthly incremental payments to eventually pay off the balance of this loan. Unfortunately, this monthly payment can be unaffordable on the income of the average intern or entry-level worker. This is especially true when this monthly payment is combined with other monthly expenses such as credit cards, groceries, rent, car payments, and auto insurance.

Student loan consolidation can be beneficial to a new graduate because all of their student loans will be combined into one debt. This can be helpful in many ways. For one thing, it means that the student only has to keep track of one due date per month for his/her student loan payments. Additionally, student loan consolidation can result in a lower monthly payment amount. This can free up more of the former student’s income so they can pay off other high interest debts or make large purchases towards their future.

Another benefit of student loan consolidation is that a consolidated student loan will have a fixed interest rate. Student loans granted through the US Government have variable interest rates that are likely to increase annually. The fixed rate of a student loan consolidation allows for better budget planning on the part of the graduate. A fixed interest rate is also likely to save him money in the long run as variable rates can be much higher.

One of the best features a student loan consolidation has is that it is easy to apply for and there are no additional fees to pay. Additionally, bad credit is not a factor in being approved.

Unlike other companies with debt consolidation programs, a consolidated student loan will not charge the borrower a prepayment penalty. This is a great feature for the graduate who may become financially successful in the future. He may be able to pay his debt quickly and save additional money in interest.

The application process should begin with a search for various lenders who offer this service. This is done so that the student can compare the interest rates and discounts offered by different lenders. Some lenders will offer bonuses to their new applicants. Commonly, lenders will offer a reduction in the fixed interest rate if the borrower utilizes electronic payments, pays their loan on time for a period of 12-24 months, or if the borrower is still in their initial default period.

The applications for student loan consolidations are generally easy to fill out. The traditional method of filling out the paperwork for a student loan consolidation is to receive the application via postal mail. However, most lenders now offer online applications to speed the process along. The same information is requested no matter how the application is completed.

It is important to note that the student loan consolidation application will require the applicant’s social security number. This is not used for a credit check or to determine the applicant’s consolidation package. This information is needed so that the lender may contact the U. S. Department of Education regarding your student loan balance.

Other information needed to complete the application may include the student’s name, address, driver’s license number, and two personal references. The financial information included in the application will refer to income from the previous tax year and current working situation. All totaled, this student loan consolidation approval process will last 40 - 60 days.

For those graduates who want a simple way to keep up with paying their student loan debt, a student loan consolidation may be the answer. There will be one loan amount, one interest rate, and one payment due date per month. As far as loan refinancing goes, it doesn’t get any easier than that.

Student Loan Debt Relief - School Loan Consolidation

In order to relieve some of the financial burden associated with furthering their educations, many students are opting to consolidate their debt at lower rates, and getting a longer period of time to repay. The following paragraphs will answer some commonly asked questions about the subject, as well describe how it can aid in debt relief.

What Is Student Loan Consolidation?

It is the act of combining your school loans into one in order to help manage your financial burden caused by college or trade school.  When you consolidate you will only have one monthly payment to make, which is usually lower than your combined monthly payments of your unconsolidated loans.  This is possible because when you consolidate, you are generally offered a longer time period to repay - sometimes up to 30 years.  Many consider the lower payment a huge benefit, which it is, but it can also cause you to pay more interest, over a greater length of time, than you would with your combined unconsolidated student loans.

The rates are generally lower, and most often the rate will be fixed.  With unconsolidated loans, most commonly the interest rates are variable, which means they can change at any time, sometimes without much warning.  With a fixed rate, the monthly interest will remain the same throughout the entire duration of your consolidated loan.

What If I am Default on My Student Loan Payments?

If you are default in making your payments, you may still qualify. It is important to check with your debt holder, to ensure your defaulted loan has not been subject to wage garnishment.  If your defaulted debt is subject to wage garnishment, you may not be able to consolidate.

How Can I Obtain More Information Regarding School Loan Consolidation?

There are many ways to obtain more information regarding this issue including:

·    by requesting it from the financial aid office at school
·    by requesting it from the holder of your original student loan
·    by researching the internet

 Information is usually available in any financial aid office of any learning institution.  If you cannot get to your financial aid office, or if your financial aid office does not have the information you need, please request the information from the holder of your original loans, or search the internet for valuable information on the subject.

Knowledge is the key in finding the best rates available.  The more knowledge you have on the subject, as well as knowing your credit scores, the better your chances of getting a good interest rate when consolidating your loan.

 Education costs are quite high these days and this is the reason why so many people often end up with multiple student loans. It is not only the high tuition fee for education like medical that makes students take multiple student loans. Even students in public universities doing average programs require financial aid.

Student loan consolidation is a big help when the time for repaying all these loans comes around. There are several benefits in going for student loan consolidation including transferring all debts to a single lender, low interest rate, reworking of the repayment plan, improving credit rating, lower monthly payments, and so on.

Students can focus more on their job and careers rather than worrying about repaying different loans. Keeping tracking of so many different payments to make each month can become bothersome and missing a payment creates its own problems that are not welcome. Through student loan consolidation, it is possible to avoid all these issues.

The student loan consolidation process typically works as follows. As a student, it is possible that you take several different loans from several loan providers. Each lender will give a loan for a different amount at a different interest rate and repayment options. What student loan consolidation does is repay the outstanding amount on all these loans, then transfer the cumulative amount to a new loan. All your current debtors with their own interest rates are paid off and you basically owe the money to a single lender after consolidation. At this point, you are also offered the chance to negotiate for a low interest rate or a longer repayment plan. This way, you get rid of the problem of keeping track of several debtors, you have a lower interest rate and that lowers your monthly payments, and you can repay the consolidated loan at your own pace.

It is also possible to seek out options in federal consolidation loans where the interest rate is fixed as long as the loan exists. It will require some digging around, looking for the one option that suits you best. But considering the amount of money this can save you the effort, is fully justified. It is also important to check your eligibility for such an option.

Several websites offer you an online calculator where you can calculate the interest rate on a consolidated student loan based on the interest rate on your current loans. After this, you simply round off to the closest 1/8th of a percent of the weighted average of the interest rate on all the student loans for which you are eligible.

Most student loans come with a repayment plan spanning around 10 years starting 6 months after completion of the education program. Through federal consolidation loans it is possible to stretch those 10 years to as much as 30. Just remember that the longer you take to repay the loan, the more you are paying in interest. It is tempting to stretch the loan as much as possible but that is not always a sound financial decision as you will end up paying a lot more than you should.

It is also possible to lock in a low interest rate while you are still in school. Locking the interest rate will instantly require you to start repayment but since you are still a student you also get the benefit of deferment until your program is finished. The obvious disadvantage to this procedure is that you are no longer eligible for the 6 month grace period. Your repayment begins the day your education program is completed. You still have an option of requesting forbearance for up to 12 months on the consolidated loan. Once again, you have to judge the worth of this exercise based on your financial situation and job prospects.

Availing student loan consolidation is much easier today. This is because of the limitless information on the Internet as well as the search functions available there. With a few simple searches on the web you will soon have all the information you require to get started and can easily compare them against one another to find the one that suits you best. Most websites are updated constantly to reflect the latest changes in policies and interest rates so you are never lagging behind in terms of information. Some websites offer exclusively comparison services where you basically get to compare consolidation offers against each other. These are great once you have the basic information at hand.

There are federal as well as private lending organizations offering student loan consolidation services.

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