How To Find The Best Student Loan Consolidation Programs

By Trinity Tolbert

It is really easy to accrue a lot of debt with school loans. Most people have to take out several loans to complete their education. This can leave them with a lot of loans from different lenders. Repayment of these loans takes time since you are paying different lenders and it can be expensive. You can save some money and time if you consolidate your school loans.

You might have government loans or private loans or even both. The loans you have will affect the consolidation program you choose. There are different consolidation programs offered for private and government student loans. Even if you have both, you still have the option to consolidate your debt.

If you plan to consolidate, there are a few different consolidation programs. Which one you choose may depend a little on what type of loan you received. There are different consolidation programs for private loans vs. government loans so be sure to look into your options based on the types of loans you have.

If you have government loans, watch to make sure that the interest rate you are offered for consolidation is actually lower than the interest rate on each loan. On occasion, loans issued by the government can have really low interest rates, especially those offered based on need. If you have a loan that is at a lower interest rate than the consolidation interest rate, you will probably want to leave that loan out of the consolidation to save yourself money. There are four main refinancing options usually available when you consolidate loans. The first option is the standard repayment plan where you make monthly payment plans on a fixed interest rate over a period of ten years to thirty years, depending of the type of consolidation refinance program and lender you choose. The second option is the extended repayment plan where your payments are less than payments under the Standard Repayment Plan, with repayment periods ranging from twelve to thirty years, depending on the total amount that you have borrowed.

Third, there is the option of the graduated repayment plan. Repayment on this plan is also twelve to thirty years depending on how much you owe, but it is different in that the monthly payment starts out lower and increases every two years.

Finally, there is the option of the income contingent repayment plan. This is an excellent option for people with low income and or large families since the repayment is based on your total debt, annual income, and family size. Your repayment schedule will span over twenty-five years. Whichever student loan consolidation program you decide is best for you, it will most likely help improve your financial situation.

About the Author:

Trinity helps people to learn about student loan consolidation, how to find federal bad credit student loans, and about bad credit private student loan.