Debt Consolidation Student Loans

Debt Consolidation Student Loans

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This video goes over how to get out of debt fast using Debt Consolidation Loan. You may have heard this buzzword and want to know what it means? In layman’s terms, a debt consolidation loan combines several smaller bills into one larger bill at a lower interest rate.

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Debt Consolidation Student Loans

What is Debt Consolidation?

This is the process of combining several different types of loans into one type of loan, called a consolidation loan. When you take out a consolidation loan you do not have to pay interest while making payments on other credit cards and loans. You may be able to lower your monthly payment. There are some things you should know about debt consolidation before doing it.

Why would someone want to consolidate student loans?

You could use your student loan money to make higher monthly payments, if you have several smaller student loans, instead of just one big one. If you do this, you can lower how much money you owe each month. Another good reason to consolidate student loans is if you want to pay off your student loans sooner.

How does a consumer benefit from this?

Consumers who are looking to consolidate their student loans often find that they can reduce how much money they have to borrow in order to repay them. Consumers also get rid of high-interest rates. A consumer might even be eligible for a lower rate on his/her consolidation loan than he/she was paying before.

Is consolidating student loans a good idea?

It’s a smart move especially if you don’t have any extra cash lying around. A person can always put together a budget using the information given here. A person should only consider this option after trying to work out a repayment plan without it.

Pros and Cons of Debt Consolidation

Pros

The biggest pro is that you’ll save money by having only one set of payments instead of several. That way you won’t have to worry about late fees and penalties. Also, you won’t have to make a payment twice, once for each loan

Cons

One con is that it may not be possible for a consumer to lower the amount paid per month. Another concern is that the interest rate on a consolidation loan may be higher than on individual loans. You may end up paying off your student loans longer due to the interest rate.

Debt Consolidation Student Loans

What is debt consolidation?

When someone applies for a loan, they have to provide their credit rating. Debt consolidation is when a person takes several different loans and combines them into one. While consolidating debts may help make payments smaller, it does not get rid of the underlying problem. The goal of debt consolidation should be to pay off as many debts as possible.

How do I consolidate my student loan?

To learn how to consolidate your student loan, contact a company called Loan Collection Services. They work directly with lenders to negotiate lower interest rates and payment terms. If you are approved for the program, they will work with you to set up automatic monthly payments.

Why would I want to consolidate?

If you cannot make your scheduled payments, then your account could go into default. You might incur late fees and penalties, and if you cannot keep up with the additional payments, your lender may start repossessing your property. One way to avoid having your property taken back is to call a debt consolidation service. By taking out one consolidated loan instead of several individual ones, you’ll save money over time. In addition, you won’t need to worry about making your individual payments anymore.

Does debt consolidation still involve a bank?

No! When you take out a loan with one company, they act as your agent or liaison between you and the lender. Your original creditor remains unaffected; however, you don’t have to deal with all the paperwork and bureaucracy involved in managing several different accounts.

Do I qualify for debt consolidation?

Yes. As long as you have had at least three consecutive months of missed payments, then your loan qualifies.

Can I use my home equity loan for debt consolidation?

No. Even though this type of loan is referred to as debt consolidation, it’s actually a personal loan that uses your home as collateral.

Will consolidating my student loan hurt my credit score?

Not necessarily. Most banks report only the amount due on each loan separately, and not the total amount owed. However, some lenders report a number that includes the balance of the consolidated loan. So even if you successfully consolidate your loan, it doesn’t mean that your credit rating will improve.

Debt Consolidation Student Loans

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Debt Consolidation Student Loans

How does student loan debt affect your financial situation?

Student loans have become a hot topic of discussion lately due to their ever-growing numbers and the fact that they often times cannot be paid off during college. There are many types of federal and private loans available (including “direct” federal loans), and the maximum amount that can be borrowed varies between them. Direct loans give students more flexibility than do private ones, in that they don’t require co-signers or cosignees, and the interest rates are generally lower. However, once the borrower graduates and begins paying off his/her loans, he/she may find themselves having even higher monthly payments than before, since these types of loans accrue interest over time – potentially putting borrowers deeper in debt. If a borrower defaults on his/her loans, they may be reported to credit agencies, causing damage to one’s credit history.

What do you know about government-backed student loans?

The federal government provides two different types of loans that are granted to students who want to attend school; however, both are not without flaws. Federal Stafford loans are offered by the U.S. Department of Education, and are considered government-backed. These types of loans offer low interest rates, and have lower payment requirements, but carry a high level of risk for default. Private loans are provided by banks, credit unions, etc., and are completely non-government backed. Interest rates charged on these types of loans vary widely depending on whether they are fixed or adjustable rate, and how long the loan term is.

Is the government making things worse by offering student loans at an increasing number of schools?

Yes, according to some experts, the current state of student lending is being created by many factors. According to a 2014 report released by the Consumer Financial Protection Bureau, the CFPB conducted a study d, “Do Lenders Give Students Straight Talk About Loan Fees?,” which revealed that most lenders don’t tell applicants what percentage of their income they would need to repay based on the type of loan they choose. In addition, many institutions charge interest rates on federally subsidized student loans that exceed the rates for other forms of borrowing.

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