What is meant by loan consolidation? In simplest terms, it talks about bringing together all your loans and putting them under a single policy. Another term that could be used to refer to this is through student refinance procedures. What are the advantages of such a move? Some of the major advantages of loan consolidation include convenience (you wouldn’t have to worry about paying numerous creditors), typically lower monthly payments and interest rates, and a longer repayment schedule (a typical range of 10 to 30 years).
Some other loan consolidation information you’d need to know: your new loan would have new terms, so it’s very important that you carefully understand the fine print (such as your term payments, repayment period, and rate of interest). You may also need to find a new guarantor, as consolidation of different types of loans (that is, federal consolidation and private consolidation) cannot be done. There are disadvantages, however, and some of these include having a fixed interest rate on your loans (meaning you won’t be able to benefit in case your original loan’s variable interest would go down), and you may lose some of the benefits that went with your original loan.
There is also a specific list of loans that are available for consolidation: some of these include Supplemental Loans for Students, Federal Perkins Loans, Federal Stafford Loans and Loans from the Department of Education. For a complete list, look up edfed.com.
In any case, it’s a good idea to know your options, and here are some of the loan services that you could look at:
- Federal Direct Student Loan Program. This is also known as the William D. Ford Federal Direct Loan Program; this is one of the most reputable and popular student loan consolidation programs available. Check out its website at ed.gov.
- Loan Approval Direct. This is another highly-recommended loan consolidator that could help you lower your monthly premiums by 60%. Interest rates could also go as low as 3%. Try it at loanapprovaldirect.com/.
- DebtConsolidation.com. Check out this website for more information about debt consolidation processes and procedures. Take advantage also of its fast response rate so you could know right away of your eligibility for debt consolidation.
It’s highly important that you check with the Department of Education to see whether the educational loan consolidation companies you are looking are indeed certified and legit. Also, it’s best that you ask help from a student loan consolidator and student loan lenders who would give you one-on-one advice on how to consolidate your loans. You could also make use of available tools like loan calculators (check out one available at studentloanconsolidator.com and another one at ed.gov) to help you determine whether a student loan consolidation would certainly be your best option, and which particular student loan lenders would be the best for your particular situation.
Apart from these online consolidators, you may also choose to look into traditional credit unions or banks for refinancing; this is specially recommended if you’ve dealt with them before in the past and you trust them enough to give you good rates. However, an advantage of online loan consolidators is that they are typically more competitive with one another and they end up giving the best rates and packages.