Student Loan Consolidation guide

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        Student loans are loans that are offered to students to assist in
payment of the costs of professional education. The government of the
country offers these loans and at a very low rate of interest.

Student loans are a great help to students who plan to do further
studies, in their own country or abroad, but lack the requisite funds to
do that. In this way student loans not just assist the student but also
his family.

Many institutes and universities offer student loan. There are different
types of student loans. So there are several options available for
students to choose from. Broadly there are two types of loans available:
Federal loans and Private Educational Loans.

The students opting for Federal Students loan program are funded and
administered initially through the US Department of Education's Federal
Student Aid Programs. These loans are the easiest to get student loan
consolidation services. The Federal student loan programs disburse about
$60 billion a year. Stafford loans are the most common form of federal
loans for students.

Private student loans are administered by standard lending institutions.
The most commonly opted loans in this are Sallie Mae Signature and the
Citibank student loan. These organizations provide unsecured loans to a
student and charge hefty interest on it.

A student can combine the private and the federal loans to gather funds
for his further studies. However a student should bear in mind that these
two loans should not be combined or consolidated. He should consolidate
his federal loans first and then separately consolidate privately the
student loan debt.

Student loan consolidation refers to building all your student loans into
a single loan with one lender and one repayment plan. You can plan to
consolidate your loan like refinancing a home mortgage. The time you
consolidate your loan, the balances of your other current loans are paid
off, with the total balance playing over into one consolidated loan.
However at the end you will be left with just one student loan to pay
off. The student loan can be consolidated by the student as well as his
family i.e. parents.

There are several benefits of consolidating a student loan. For instance
loan consolidation offers lower monthly payments, combining of your
student loan payments into just a single monthly bill and the lock or the
stoppage loan consolidation puts in a fixed, usually lower, interest rate
for the term of your loan thereby saving thousands of dollars as per the
interest rates of your original loan.

Moreover there is no fees, charges and other prepayment penalties after
the loan is consolidated. The consolidated loan offers flexible repayment
options. The loan consolidation can be done without any credit checks or
The interest rate of your consolidated loan is calculated by averaging
the interest rate of all the loans that are consolidated. The figure that
so appears is rounded up to the next one-eighth of one percent and so the
maximum interest rate comes out to be 8.25 percent.

Loan consolidation is a wonderful option if this lowers the interest rate
of your current loans especially at the time you are confronting problems
in making monthly payments. But if your current loan is about to end,
consolidation is just not a wise idea.        <!--INFOLINKS_OFF-->

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