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.

Benefits

 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.