Consolidating the federal student loans

There are various options through which you may be able to consolidate the federal student loans. Try evaluating the options that you have with regards to debt consolidation on the federal student loans. With debt consolidation, all of the debts that you have are combined together and the interest rate gets lowered. This eases the debt pressure a lot. So, what are the consolidation options with regards to your federal debts?

There are the Traditional Direct consolidation loans and the Special Direct loan consolidation loans through which you may be able to pay off the federal student loans. The Direct Consolidation Loan option provides the borrowers with the option to consolidate the federal student loans as a single loan. These two options are being offered by the U.S. Department of Education from January through June 2012.

In case of the Special Direct Consolidation Loans, the borrowers who have loans as per the descriptions below will find themselves eligible to get their student loans consolidated through this option. The students need to have:

• At least one loan through the Department (this can be a Direct Loan or a Federal Family Education Loan or FFEL held by the Department and which was serviced by a servicer of the Department); and
• At least one commercially-held FFEL loan (FFEL loans which are owned by a FFEL lender and have been serviced either by the same lender or have been serviced by a servicer who have especially been contracted by the same lender).

The consolidation options which are eligible for the Special Direct Consolidation Loan program are the FFEL Subsidized and Unsubsidized Stafford Loans, the FFEL PLUS Loans (the ones taken out by both the graduate or professional students and the ones taken out by the parents to pay for the expenses of the undergraduate student) and the FFEL Consolidation Loans.

Now, in order to be eligible for this special consolidation program, the loans will also have to be in the grace period, or in repayment or deferment or forbearance. The Perkins loans, private student loans Health Education Assistance Loans (HEAL), Health Professions Student Loans (HPSL), Nursing Student Loans (NSL), Loans for Disadvantaged Students (LDS) are not eligible to get consolidated under this program.

Tips to pay off student loans

Here are some tips you need to know in order to pay off your student loans.

1. List your debts – Find out the exact figure of the amount you owe towards your student debts. You may have been unaware of the total amount throughout your school but it is an important step towards your debt elimination and you need to find it out now. Along with the amount of debt, note down the due dates, the interest rate and the monthly payments on them. This will help you get a thorough idea about the debt situation you are in.

2. Types of loans – Find out the type of loans that you have taken out. There are various types of loans such as Stafford, Perkins, HEAL and PLUS loans. Go through the contracts of all your loan contracts thoroughly that you have taken out and make a list of them.

3. Find out the repayment options – Gain knowledge about the various loan repayment options. After graduation, you can get a grace period of 6 months when you do not need to pay off your loans. However, the longer you take to pay off your loans, the more interest rate may be accumulating. Thus, make sure you find out the different payment options and choose the one that suits you most. Some of the repayment options are standard payment, graduated payment and income-based payment.

4. Loan forgiveness – You can apply for a loan forgiveness option. Some of such options are Americorps. If you are willing to dedicate one year volunteering for Americorps, you can pay off $4,725 to pay off your college debts. Other such options are Peace Corps, if you join the Army Reserve or the National Guard after graduation. Thus, find out if you are eligible for any of the loan forgiveness options.

Thus, get help from the tips mentioned above and you can get rid of your student loans and lead your debt-free life as soon as possible.

o First of all, you must be clear that there are many types of private student loan consolidation programs offered by the lending institutions with different interest rates as well as variable application requirements. You need to be diligent in doing detailed researches to find out as many options as possible in the market.

o The approval for this private loan consolidation program is based on the credit score of the applicants. The lenders usually fix it as a key requirement. As a result, when you are applying for this type of program, please get yourself ready with your credit report. You can request for a free credit report from one of the consumer reporting companies such as Experian, TransUnion, Equifaxor, etc. You can also get it on complimentary basis from the official website of AnnualCreditReport.com. Bear in mind, if your credit score is unsatisfied, a cosigner is definitely required.

o To some of the students, it may be hard for them to search for reliable private loan consolidation institutions. There are two well known ones, i.e. City Student Loans and Wells Fargo Private Consolidation Loan.

o In general, the interest rates of these private programs are usually slightly higher than federal loan consolidation rates. As a result, when you are consolidating your private loans, don’t compare the interest rate with federal ones.

For more information about student loan debt consolidation and student loan consolidation rates, visit GetAStudentConsolidation.com.

Step 1:

o Gather all the detailed information about all your different student debts. If you have both federal government loan and private loan, separate them first and put the priority on federal student loans. Write down the amount of each of your student loans together with the name of lenders and the current loan account numbers. Include the outstanding balances as well. Then write down each of the interest rates beside the loan amount.

Step 2:

o Start estimating the loan consolidation rate based on the weighted average of all interest rates. You may try to calculate it on your own. If you totally don’t have any idea about the formula, you can get the rates easily online. Many lenders offer online loan calculator for public. You can get an estimate figure of your monthly payment, new interest rate and the terms of your new loan easily through internet.

Step 3:

o Where can you “place” all your loans? It is wise for you to start with banks and some financial institutions you know. Call or visit the banks personally to consult the loan officers in order to get more details about the interest rates and repayment period.

Step 4:

o After doing your market research, start comparing all the packages offered. The comparisons should be based on the interest rates, repayment period, benefits as well as additional terms on the policies. Analyze all the related items carefully. Interest rates will be the key factor.

Step 5:

o Once you have made up your mind, submit the application form to the bank you prefer and wait for approval. The last step will be signing the terms and promissory note.

It is important for you to keep in mind that current regulation stipulates that you can only consolidate your study loans once. Make sure you are extra careful in selecting the consolidation rate so that you can save the most in the long run.

For more information about student loan debt consolidation and student loan consolidation rates, visit GetAStudentConsolidation.com.