Title: Student Loan Consolidation During Grace Period - Things Your Need
Category: student loans
You've done it! You have finished college and now the excitement of
finding work starts. But with it should also comes a worry about repaying
your student loans. But don't stress out too much, there is still a
little bit of time, before you start getting your loan repayment bills,
this time is called grace period. Find out what grace period is and how
you can use it to greatly reduce your debt with student loan
What is a grace period?
Grace period is the time between your graduation and the time when you
start receiving bills for your student loan. The idea is to give you a
little bit of time to find work, so you can easily make your monthly
payments. Usually grace period is 6 month, but it can be different for
every loan. You will have to check your loan papers to confirm how long
your grace period is.
If you have not consolidated your college loans already, grace period is
the perfect time to do so. If you go for a student loan consolidation
program during your grace period, with most lenders you can lock a lower
rate for your new consolidated loan. If you want to consolidate after the
grace period, your rates will be higher.
Why go for a student loan consolidation?
There are many benefits of consolidating your loans. First, the interest
rate on your new consolidated loan will be lower than the rate on your
existing loans. This means lower monthly payments and shorter time to
repay your loan. Second, you will get one bill instead of several, so it
is more convenient. Third, most lenders offer special discounts and
benefits when you consolidate. Usually you get rewarded for paying before
the due date, for example your rate can be reduced by 1 percent after
making 24 payments on time. This can be a big saving, especially if you
have a big debt.
Are there any disadvantages of loan consolidation?
There is one possible disadvantage - when you consolidate your interest
rate is locked, it won't get any higher or lower while you repay. On the
other hand, the rate on your unconsolidated loans might increase or
decrease over time. So in theory it is possible that in the future your
loan rate will go down and become lower than your consolidated rate.
However, in practice, bearing in mind current economic situation it is
very unlikely. So I would say, there is absolutely no reason, why you
shouldn't consolidate your debt.
How consolidation during grace period works?
If you took a federal student loan, consolidating it during your grace
period would give the same results as consolidating while you are still a
student. In a sense grace period is a time when your student status is
deferred or postponed by six months. After that, you will be in repayment
period. In-repayment rates for consolidation are always higher.
If you have several loans by private lenders, the situation is a bit
different. They might not give you any grace period at all. So it is
important to review the terms of your loan before you graduate.
Consolidated loans don't have grace periods
One thing you have to know is that consolidation loans don't have any
grace period. That means that generally you will get your first bill in
60 days after you have been approved for consolidation. So if you think
that you might need some time to find work, it is better to wait with
consolidation before your student loan come close to the end of their
Don't miss the opportunity to consolidate your loans while you are still
in grace period. You can save a lot by locking a lower rate.