Over time many students find that have accumulated a series of education loans from several different lenders and that not only does this represent a considerably debt, but they are also having to pay out more money than they can afford each month.
At best this means that they are going to have to tighten their belts but, at worst, it means that they will start missing payments and end up with a bad credit rating – which is the very last thing you need when you are just starting your working life!
However, making use of a student loan consolidation service can help considerably by reducing the number of lenders you have to deal with, often to just a single lender. It can also reduce your commitment to a single monthly payment which, depending on the interest rates on your existing loans and the interest rate on your consolidated loan combined with an extended repayment period, can reduce the amount of money you have to find each month considerably. Indeed, in some cases, it can cut your monthly payments by more than 50%.
Just how you go about achieving college loans consolidation will depend upon the source of these loans.
If your loans have come from the government (for example Stafford or Perkins loans) then you will need federal education loan consolidation money and that in essence means a US Dept of Education consolidation loan.
Federal government student loan consolidation is only available for loans issued under the Federal Family Education Loan Program (FFELP) but allows you to consolidate these loans into one single loan and to reduce your monthly payments by extending the period of the loan. In this case consolidation is generally only available after you have completed your college course, together with any post-study grace period, and are fully responsible for the repayment of all federal loans.
When it comes to college loan consolidation for loans from private sources there is no ‘waiting period’ and you can consolidate these loan just as you would credit card or any other loans at any time on the open market.
The secret when it comes to loan refinancing is to consolidate your loans before you start to run into difficulties meeting your repayments and to ensure that any consolidation program you apply to will present you with a manageable repayment plan.