Comparison of Student Loan Consolidation Programs

To most of the fresh graduates passing out from colleges, it’s definitely a painful issue to pay back those hefty loans which they’ve taken to support their college/university studies. If you’re one amongst them and paying multiple rates to multiple loan agencies, you definitely know how it feels. Did you know you can easily save thousands by consolidating your student loans? In fact, you can either go for private or federal student loan consolidation. Comparison of student loan consolidation programs is now easy as you can do that online on many websites.

 Primarily, you must have a clear knowledge about the total loan amount and the accumulated interest. Now just add up everything and …..voila! You’ll see before you a lifetime of debt. But there’s no need to fear, as student loan consolidation is the best way to go and will come to your rescue! The final amount you have before your eyes is your starting point for choosing the best program for your needs. The monthly bill to be paid should never be more than 20 percent of your monthly earnings. You still have to live a decent life, don’t you? Your primary focus should not be jus ton paying off your debts, but also to live a moderately comfortable life.

Loan agencies

 There are many loan agencies that work in the US market. Federal loan consolidation is available to you from federal government. It doesn’t need a co-signor or credit check because this consolidation program is protected by federal government.

 Private student loan consolidation programs are offered by credit unions, banks and loan agencies. Depending upon the loan agencies, you might have to get your credit history check or provide a co-signer.

How they work?

 Both these programs are highly useful as they are meant to combine your multiple loans into one single loan so that you can enjoy just one lower monthly payment at a lower interest rate. For federal student loan consolidation programs, you can only combine federal loans. But in case of private student loan consolidation, you can easily consolidate your student loans together along with your personal loans.

 Besides that, when you’re opting for federal student loan consolidation, you’ll get lowest rates that will lock for the whole loan period. For private student loans, however, your rate might fluctuate at a market rate. You can also talk to the loan agency to look at the possibilities of getting the lowest possible rate.

Credit History for Student Loan Consolidation

 Your credit history is important and with a student loan consolidation program you can easily add few extra points to your reputation. If you’ve a big loan and you are always late on your monthly payments, you know everything will be registered on your credit card.

With easy student loan consolidation, you’ll be easily able to pay the full amount with just one monthly payment. You will also save good monthly and can also boost your credit score.


 When you are comparing various student loan consolidation offers, try to pay some attention on the benefits as they can ease your life considerably. For instance, you can benefit from reduced interest rates for making regular payments, automatic debt repayments or online application filing. So it’s up to you to decide on which of these benefits will help you with your financial issues.

 As discussed above, you can also improve your credit score with student loan consolidation. This is so because with loan consolidation you’re being seen as servicing one big loan instead of multiple loans.

 Though you will get lower rates with federal student loan consolidation, but you can always negotiate with private agencies to see if there’s some alternative available to you to get a better interest rate.

Student Loan Forgiveness

Are you among the great number of Americans who always nurture this desire to see their student loan debt disappear one day? Well, this can be a reality; but there are several conditions that need to be met. These programs are not a quick-fix solution. They require several years of regular payments by borrowers before the federal government can provide Student Loan Forgiveness.

A friend of mine, Sean, paid part of his student load off with extra money from a $30,000 kitchen remodel project. The company that did the remodel for him helped him acquire a load for the project, and after the loan was put in escrow the project was started. Through a number of minor changes that saved a little bit of money here and there, when the kitchen remodel was finished, Sean had almost $1,200 left that he used to pay down some of his remaining student load balance. Sean gave me the kitchen remodel company’s web address so I’ll add the link in case anyone is interested.

Most of those with outstanding student loan balances do not have the option to try Sean’s method though. However, there are various student loan forgiveness programs that have been designed and offered by the government to reduce the mounting debt from the borrowers’ shoulders. However, there is a lack of awareness of these programs. With the help of the internet, access to information is not an issue anymore. In fact, one can look online for a debt relief company and discuss the matter. It is always helpful to consult a student loan specialist and get detailed information about these repayment and forgiveness options.


Student Loan Consolidation and Forgiveness snapshot:

Most of the student loan programs are associated with low-paid careers such as public services or teachers and carry a lot of restrictions on them. Let us take a look at some of the programs.


Income Based Repayment (IBR):

As per this program, borrowers can be eligible for reduced monthly payments and after 25 years of regular payments, the balance is forgiven. If your loan amount is considerably higher as compared to your income and family size, you may be eligible for $0 monthly payment. Check online to see if you qualify or talk to your mortgage consultant to see your eligibility for this program.


Pay as you Earn Plan:

Under this, borrowers may get their loans forgiven after making reduced monthly payments on their debt for 20 years. You need to provide evidence of at least partial financial hardship apart from the mentioned eligibility criteria. Get in touch with a leading debt consolidation company to learn more details on this.


Public Service Program:

This program was launched in 2007 for people who are employed in public enterprises. Borrowers who work in federal, state or local government jobs can seek this program. Borrowers who have a high student debt in comparison to their income can qualify for this. They also need to make 120 regular monthly payments against their debt, and they must also be employed at a full-time public service job for a minimum of ten years (these can be non-consecutive years). The loans that qualify for this are:

Federal Direct Loans

Federal Family Education Loan (FFEL)

Some Perkins Loans can be consolidated into a Direct Loan

Borrowers, who are not sure about their loan type, can contact student consolidation consultants.


Teacher Loan Forgiveness:

Borrowers may be eligible for some other loan forgiveness programs from their employment. For example, teachers may be eligible for the teacher loan forgiveness program. However, they need to be in the teaching profession at a qualifying school for five consecutive years to get a part of their federal student debt balance forgiven. Check with a debt consultant for more on this.

It is important for borrowers to keep a tab on their debt and make a regular payment. Student Loan Forgiveness is a long-term benefit, and borrowers need to be responsible for qualifying for these programs.

Why Consolidate Student Loans?

What is a student loan consolidation?

Over the course of your studies, it is likely you are going to take up a number of student loans if you depend on them to finance your college education. Things can get a bit hectic when you are required to make the multiple repayments. In case you have more than five loans with each of them coming with its own statement, you need to find a better way of managing the process.

Consolidating your student loans is a great option that comes with many benefits. If the thought has not crossed your mind, and you are wondering why consolidate student loans, then you need to read on to find out why it is in your best interests to do so. When you opt to consolidate, you end up making one loan repayment as opposed to many separate payments.

The consolidation process involves identifying a suitable lender to combine and take up your old loans and subsequently clear all of them. You are thus left with one new loan from the lender to repay. To qualify for the arrangement, you must have completed your studies. In addition, you must have a good repayment record in repaying your current loans. If you have had any case of default, you may find it difficult to find a lender.


Benefits of student loan consolidation

The most notable benefit of consolidation is the fact that you now have to pay one check as opposed to making many different payments. The process gives you peace of mind because you do not have to worry about missing some payments. Should you choose the consolidation path, you get a fixed interest rate that can save you a lot of money especially if you take the loan at a period when interest rates are low. When you have to pay many loans with a variable interest rate, you may end up paying a lot of money in interest.

A huge benefit of combining your existing student loans to one consolidated loan is that you can now negotiate for a longer repayment period. It is possible to stretch your new loan for up to 30 years meaning that you can end up paying a low monthly amount. If you go about the process right, you have a chance to lower your loan repayments by up to 40%.

Having graduated and with the ability to repay your loan, you do not need to have a co-signer on your loans. Should you opt to go the consolidation way, it means that you will eliminate the co-signer from the process. Removing a parent from the position of liability is the least you can do after the sacrifices they have made for you.


Student loan consolidation concerns

As you go about the consolidation process, you need to keep in mind that although you will now be making lower repayments, you will pay more money in interests as a result of the extended repayment period. When you consolidate, you give up on favorable terms that come with student loans that include a grace period or an income based repayment plan.

In case you were wondering why consolidate student loans, you need to look at the pros and cons detailed above before making a final decision.

Private vs. Federal Loans

The celebration of your college-starting can really be the best time of your life. You almost have it all – the happiness of your parents, your own happiness, your hard work has finally paid off, you can start a new era in your life and change everything. Yes, it is a supreme joy that overwhelms you and your family. However, there is still one partybreaker lurking around – the money, which is from now on to be called the student loan.


Certainly, loans for students are a good solution, if you want to have some extra money, or if you’re diligent and you want to pay for the whole college throughout the years. Depending on your preferences and finances, you can choose between federal and private loans. The exact word “loan” does sound like something you know you’re going to regret, but it can save the house budget in the crucial moment.



Probably the most relevant difference between private and federal student loans is the charging of the interest. Federal loans have a fixed interest rate, and that is desirable since it means that the rate is not variable, it will not change during time. Private loans are more flexible with these rates, and their interest can vary. You should also know that this is not legally regulated; in other words, there is no legal limit for the interest rate when private loans are in question.


Federal loan can be subsidized: for undergraduate students with financial need, the government can pay the interest while you are at college. If you have the unsubsidized loan, then you pay all of the interest, although you can postpone it for several months after you graduate. In the case of a private loan, you alone pay the interest.



Repayment options are another thing you should consider. For private loans, typical repayment period is approximately twenty years, and monthly payment is not so flexible. Federal student loan has more options: it is adjusted to your income, and monthly payment can be reduced and postponed.



If you work in public service, there is an option for federal loan to be partly forgiven. There are so-called Loan Forgiveness Programs that offer the payment of some amount of the loan, under several circumstances (working in public service is one of them). However, it is unlikely that you will get the forgiveness for a private loan, this is currently only regulated for the federal ones.



Certainly, with both federal and private loan, the main problem is the amount that is given to you. Typically, the federal loan does not cover the tuition. Private loans offer more money, but then their interest is greater too. But, it is a good long-term investment, if you are going to be a well-educated individual.



If you’re applying for a private loan, it is very possible that you will need a cosigner. Most students don’t have any credit history, and that is usually necessary for getting this kind of loans. For federal student loans, you don’t need a cosigner in most cases.


The financing of the chosen college can be a problem for a student, as well for the whole family. But, it is worth it, that’s for sure. Therefore, if student loans can help you in dealing with the money during the most beautiful part of your life (the college time is unforgettable), then it is a risk worth taking.

Introduction to Student Loan Consolidation

When consolidating student loans, it’s imperative to be familiar with what you’re getting into first. The consolidation of student loans is not a difficult procedure, but it often appears to be for most students. However, there are several regulations and rules you have to keep in mind before you decide to consolidate the loan into a manageable one. Here are some of the most imperative regulations and facts pertaining to student loan consolidation including a basic Introduction to Student Loan Consolidation. Ensure that you understand each of these facts before you go through with the consolidation process.

The Student Loan Consolidation Is Free

You should never pay any fees for consolidating your student loans, the process is totally free. If the lender is charging you to consolidate your loans, you should take your business somewhere else. Many student loan consolidation scams have emerged. These scams are frequently referred to as “advance fee loan scams” and are very common.

You Cannot Consolidate Loans While You’re Still in School

Consolidation of student loans can only be done after your loans enter their grace period, which is six months after dropping out of school or graduation. Consolidation can as well be done once repayment of loans starts, although it is advisable to consider consolidation before this point.

You Can Only Use Your Name to Consolidate the Student Loans

This rule seems obvious, but in cases where the student has their parents’ name on any of the student loans, or is married, it might come into play. Parents and students might consolidate their loans. However, they cannot combine them into one consolidated loan, they must all be separated. The same thing holds true when it comes to married students, who both have the student loan debt. Married students cannot combine their student loan debt into one consolidation loan.

Graduates and Students May Consolidate With Any Lender

There are no restrictions that limit the lender who is eligible for consolidating student loans. Therefore, you might choose whatever lender you wish. This gives you the chance to shop around for the best lender with the best incentives and interest rates. However, always go for lenders who are ready to give you easy and manageable loan repayment terms.

All loans are eligible for consolidation

Any kind of federal student loan can be consolidated, including single student loans. Remember student loan consolidation is a government program that allows students to combine all existing single loans into one manageable loan. With this in mind, any loan from any lender can be put into the mix.

Student loan consolidation is offering former students a great chance of avoiding a life time of debt by providing simpler and easy to pay loans. There are a lot of benefits associated with consolidation. To start with, you will be able to get better interest rates once all the loans have been consolidated. Secondly, it’s easy to focus on repaying one loan than numerous loans from different lenders. In case you have not yet considered consolidating all your student loans, then you are missing out on a lot of advantages. Make sure you give it a thought today!