Student Loan Consolidation – How to Consolidate Your Loans

2007-03-08 10:33:40

( Financial )



Federal student loans and private student loans are the two main types of student loans. The government finances federal student loans so the rates offered when you consolidate them are lower than rates on consolidated private student loans, which are given by banks, and other credit institutions. Although you can use both federal and private student loans to finance your college education, putting them together in a private student loan consolidation is not a good idea.

It is important to consolidate your federal school loans separately from your private school loans so you can take advantage of the benefits of a federal student loan consolidation, which are fixed and lower interest rates, no fees, no credit reviews, no prepayment penalties and more flexible repayment terms.

You may consolidate your federal student loans if you are still in school, no longer enrolled, starting your loan repayment, or still in the loan grace period. The typical grace period of student loans is six months after graduation.

Check the list of eligible student loans to find out which of your loans can be included in the student loan consolidation. In addition, the outstanding balance of your student loans should meet the minimum amount required, which varies depending on the lender. In order to qualify for a student loan consolidation, you also must not be in default in your federal student loan payments. Most consolidation lenders require that you have not previously consolidated your loans or do not have a pending application with another consolidation lender.

You can apply for a loan consolidation online or through the phone. You can print an online form or your chosen lender can send you an application package, which you will have to complete and mail back to the lender. For those who are still in school, be sure to check the deadline of submission.

Once the consolidation lender receives your application, they will contact your current lenders to be able to transfer your loan balances into the student loan consolidation. The process typically takes one to two months, after which you they will contact you. You must continue paying your student loans while your student loan consolidation is still in process.


All rights Reserved © Tradenet Services srl
Do not duplicate or redistribute in any form.