Sunday, October 12, 2008

college loan consolidation

Consolidate Student Loans

When is the Best Time?
Student loans can become a terrible financial burden under a lot of circumstances. Don’t believe for one second that financial duress only happens to people with low incomes. Here are some of the main questions you may ask yourself about student consolidation loans:
But what exactly is loan consolidation?
What types of student loan programs feature consolidation plans?
Where can you find a student loan consolidation lender?
Is consolidation a choice that’s right for you?

Consolidating Services: Nuts and Bolts

Here’s how it works: When you consolidate your loans, be they federal or private, you essentially secure a new loan. You apply specifically for a consolidation loan with a lender. The term, “consolidate,” means to combine. This is a misnomer: your loans are not combined (even though this is what seems to take place behind the financial scenes), but the lender making your consolidation loan literally pays off your other loans, the loans you couldn’t afford to pay, even if they are owed to multiple lenders. In their place you have a new loan with a new interest rate, one monthly payment and a new repayment term. Your consolidation loan is a new loan you owe directly to this current lender, no one else involved. That’s one of the advantages.
Ideally, a student consolidation loan comes packaged with a markedly lower monthly payment and possibly lower interest rate. A longer repayment term is almost a guarantee—this is how banks make your lower monthly payments possible. This is how a loan consolidation essentially works.

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