Consolidate Student Loans

8 min read

Consolidation Loan

A consolidation loan is a type of student loan designed specifically to help borrowers put their debt into one single loan, making repayment easier. By consolidating multiple loans into one, you’re able to manage monthly payments more easily and pay back your loan faster. You may even qualify for lower interest rates if possible! To consolidate your student loan, you first need to locate an institution willing to negotiate a loan settlement. Once you have located the best institution, fill out the necessary paperwork and submit it. If approved, your current student loans could be combined with new credit card debts, auto loans, and/or any other loans you currently hold.

Private Education Loan

If your school offers private education loans, they work much the same way consolidation loans do. However, these types of loans tend to be harder to get and require you to have some sort of financial aid. In order to receive approval for most private education loans, you’ll need to provide both academic records and proof of financial need. After you have completed the necessary paperwork and submitted it, a representative with the lender will contact you to discuss terms and conditions. While private education loans aren’t the easiest option, they are definitely worth considering.

Federal Direct Student Loan (Stafford)

The federal government provides Stafford-type loans, which offer low fixed interest rates while still covering a portion of college costs. These loans should not be confused with Perkins loans, which may cover only part of the educational costs. To find out what kind of loan you qualify for, visit www.studentloans.gov.

Direct Subsidized Loan

To take out a direct subsidized loan, you must meet certain criteria, including having a high income, being enrolled at least half time, and having maintained satisfactory grades. Students who qualify for a direct subsidized loan must complete a Free Application for Federal Student Aid (FAFSA), which you can find online. Direct subsidized loans don’t expire once you graduate, but the interest rate begins to increase after nine months.

Direct Unsubsidized Loan

Direct unsubsidized loans are great for students who fall short of meeting the requirements for a direct subsidized loan. Unlike direct subsidized loans, direct unsubsidized loans don’t start accruing interest until you begin repaying them.

Parent PLUS Loan

If you already owe money for undergraduate tuition expenses—and you’ve been paying that amount faithfully each month since enrolling at your school—you might be eligible for parent PLUS loans. A parent PLUS loan can be used to pay for graduate or professional degrees, and unlike regular student loans, parents cannot use their PLUS loans to borrow money for their own expenses. Since parent PLUS loans are unsecured, you won’t have any collateral to pledge and instead will be responsible for paying off the entire amount due each month.

Federal Family Education Loan (FFEL): FFEL loans were created for students attending postsecondary institutions, and generally do not apply to K–12 public school students. FFEL loans were discontinued under the Obama administration, but can now be obtained through Sallie Mae.

State Guaranteed Loans

Consolidate Student Loans

Personal Loan Consolidation

Payday loans are a popular way to get quick cash, but they often carry high interest rates (up to 400 percent) and short repayment terms (30 days). In addition, these loans do not offer any credit benefit or protection, meaning if you default on these loans, collectors could pursue you for money owed. If you’re looking to consolidate student loan debt, consider a program offered by StudentLoanHelp.com. We help consumers pay off their debt faster while saving money in interest payments. We have helped thousands of people across the country save money on their monthly bills. 2. Federal Student Loan Consolidation Program

If you are having trouble repaying federal student loans and want to avoid bankruptcy, contact your lenders regularly to negotiate lower payment amounts; make sure to ask your lender for a consolidation counselor before attempting to restructure your debts on your own. Your lender may be able to refinance your existing student loans at 1% or less, reducing both your minimum monthly payments and total amount due. 3. Private Student Loan Consolidation Programs

If you have private student loans, contact your lender to find out what options they may offer. Many private loan companies will work with borrowers if they meet certain requirements. Make sure to inquire about the following:

How much will I need to repay?

What is my interest rate?

Am I eligible for a fixed or variable rate?

Will I receive a tax deduction?

Do I qualify for a forgiveness option?

Can I set up automatic withdrawals from my paycheck to reduce my minimum monthly payments?

Consolidate Student Loans

For many students, consolidating their student loans is one of the best ways to save money. Consolidation lets multiple lenders work together to take advantage of interest rate discounts, offer lower interest rates, and create an effective plan for paying off the loan.

Here are some tips for consolidating student loans…

If possible, consolidate before college begins. You may qualify for the lowest interest rate at the time you start school. Also, if you have private student loans, it’s likely these will be combined with federal loans. Private loans are not eligible for consolidation.

Research your choices. There are several different types of consolidation loans available. Different loans require different repayment terms, including how long you have to pay back the loan, the minimum amount paid each month, and the length of time until you’re completely debt free. When choosing a loan, ask about additional fees and what kind of credit you’ll need to get the loan.

Start small. Consider starting with only one type of loan to consolidate. One lender may have the lowest interest rate, while another lender could charge higher interest rates.

Be aware of hidden fees. In addition to upfront fees, many companies charge annual fees when you start making payments. These fees can add up over the course of the loan, even if you choose to make your monthly payment a little bit less than the total amount due each month.

Make sure you understand repayment options. Ask whether there are any requirements to keep the same loan after consolidation. Some companies only let you consolidate a certain number of times. Others require you to wait a set period of time between consolidations. And others won’t allow you to consolidate federal loans.

Evaluate your situation. Is your financial situation stable? Will you be able to afford the payments once you begin making them? Keep in mind that the longer you delay consolidation, the more expensive the loan becomes.

Find out what happens if you default. Most people who go into default don’t have trouble repaying their loan; they simply miss their payments. But those who do risk losing their homes, cars, and other assets. Talk with your lender to find out if you’re protected if you miss a few payments. Many lenders will extend your loan if you’ve missed just one payment. Still, it’s best to avoid getting behind on payments in the first place.

Know the pros and cons of refinancing. Refinancing your loan isn’t necessarily necessary, but it can help you reduce your interest rate. Your current lender may offer to refinance the loan at a lower rate, and you may be able to negotiate a lower rate with another company. On the other hand, your original lender may increase your rate.

Consider using a student loan calculator. A good online tool helps you calculate how much you’d spend each year based on your projected income. Use the calculator to determine whether consolidating makes sense.

Consolidate Student Loans

We’re about to learn how to consolidate student loans, today. What does consolidation mean? Well, let’s start at the beginning. When you get a loan, it’s generally divided up into two parts. There’s the principle amount and then there’s interest over time. And here’s where it gets confusing. If you make payments on your principal only, the principle will never go down. But if you pay off both the principle and the interest, the amount owed stays the same. So if the original loan was $10,000 and the interest rate was 5%, you would have to pay back $15,000. Now let’s say you paid on the principal only. You’d still owe $10,000 because you didn’t pay enough interest to bring the total balance below $10,000. In this case, you could choose to consolidate your loan. Consolidation means taking out a single new loan with a lower monthly payment. Basically, what happens is you take out a fresh loan for the full cost of your current loans, leaving only one loan outstanding. Let’s look at some scenarios. Say you currently have two loans, each with $9,999 in debt. The first loan carries a 4% interest rate and the second loan carries a 2% interest rate. And say you want to consolidate those two loans into one loan with a 0% interest rate. If you do that, you’ll end up paying almost $11,000 less per year. That’s great news because remember your interest rates are going down. And when you combine more than just two loans, you’ll save even more money. So now we need to figure out how much money should we borrow to consolidate our loans. First, we subtract the interest rates from the total principal balances to find the total savings you’ll receive after consolidating. Then divide the difference between the two numbers by 12 to find how many months you’ll need to pay off your new consolidated loan before starting to save again. Let’s take a look at an example. Say you have two loans: a $9,999 loan with a 4% interest rate, and a $2,500 loan with a 2% interest rate, for a total combined principal balance of $12,499. To find the total interest saved, you subtract the interest rates from your total loan amounts. In this case $12,499 x 4% $496. Divide that number by twelve to find how long it will take you to pay off your consolidated loan. In this case it’s $496 ÷ 12 $41.66 a month. As you can see, this works really well. Once you’ve figured out how much you can afford to borrow, you can use this calculator to find out exactly how much money you’ll need to consolidate your loans. The good thing is once you consolidate, it won’t affect your credit score. So if you don’t think you can handle the additional responsibility of having more than one loan, give us a call instead. Now that we know how to consolidate student

Consolidate Student Loans

When I first started my journey of becoming debt free, I had no idea how much money I would end up saving (haha). After paying off $20k of student loans at age 27, I have been able to save thousands of dollars annually just by being smart about my spending habits. Here’s what I did to consolidate:

Open an online savings account and start putting money away each month. Even if you’re only contributing $10/month, you will eventually add up! My bank now automatically transfers $50 from my checking account into my savings account each month.

Use credit cards responsibly. If you don’t need something right now, put the item on a credit card instead of using cash. Paying off the full balance each month really helps!

Shop around for the best interest rate. You may find lower rates if you shop around. But remember: the lowest initial rate doesn’t always mean you’ll get the best deal over time. Take advantage of 0% APR and low intro APR offers, but make sure you know what type of APRs apply after the introductory period ends. Keep track of your balances and the fees associated with them.

The best way to pay down your student loan debt? Consolidate! —————————————————————————————————

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