Student Loan Consolidation

Why Should You Consolidate Your Student Loans?

In the US, many college graduates make multiple student loan payments each month. Managing multiple student loans can be rather time consuming and confusing; consequently, many graduates and parents choose to consolidate student loans. The very best time to consolidate your student loans is immediately after graduating, before your grace period ends.

If you have graduated and want to lock in the current, low rates before they change, consolidate your student loans now. To qualify to consolidate your student loans, you must meet the following criteria:

You have graduated or will graduate within 6 monthsHave at least $7,500 in loansNever consolidated your loans beforeYour loans are in good standing and not in default.

Where to Consolidate Your Student Loans.

If your federal student loan debt amounts to less than about $5,000, you could benefit from a Federal Direct Consolidation Loan, which has no minimum amount to consolidate. You will have only one lender, the U.S. Department of Education, for all consolidated student loans. This type of student loan consolidation offers flexibility when setting up a repayment plan, with four separate plans tailored to meet the needs of individual borrowers. If you have already completed college, consolidate your student loans with American Student Loan Services.

If your total student loan debt amounts to much more than $5000, you should do some online comparison shopping, as national lenders often have better rates and offer additional discounts for making a certain number of on time payments, and paying by automatic monthly bank account deductions.

Benefits to Consolidating Your Student Loans.

When you consolidate your student loans, the debts are combined into a new loan with a longer repayment term. One of the greatest benefits of consolidating student loans is that doing so can actually lower your monthly payments by 50 percent or more. Student loan consolidation programs allow graduates to combine all eligible student loan debt into one loan, locking in a lower interest rate, and as a result securing lower monthly payments.

When you consolidate your student loans, the balances of your existing student loans are paid off, with the total balance rolling over into one consolidated loan.

How Does Consolidating Your Student Loans work?

When looking at student loan consolidation options, you need to be aware there are specific rules and criteria which must be met. For instance, you may not consolidate your student loans while you're still attending school (unless you are within 6 months of graduation). And you can't consolidate federal student loans which are currently in default.

You have the option to consolidate your student loans and your spouse's student loans in order to create a new loan, but, cautionary notes: Don't consolidate your student loans with those of another individual (such as a spouse or child) or any non-student loans (such as a home equity loan or personal loan).

When you consolidate your student loans, any of the loans you select, are rolled into one big loan, issued from one source. When you consolidate your student loans into one consolidation loan with one low rate and one low monthly payment, you can save 42% or more on your monthly payment as you save thousands in interest fees over the life of the loan.

Additional Things to Consider.

Building a good credit rating can help you secure lower interest rates for private student loans or when you decide to consolidate your student loans.

Once you have graduated from college you may be eligible to consolidate your student loans. It is not a good idea to consolidate your student loans with your spouse student loans.

Consolidate all your education related debt, including private and federal loans. And when you consolidate your student loans, you could get more time up to 20 more years to repay.

Summer enrollment and accelerated programs, however,generally do not qualifyyou to consolidate your student loans.

Life gets much simpler when you consolidate your student loans. Consolidate your student loans into a single new loan and make one affordable payment each month with student loan consolidation. You can consolidate your student loans anytime after you begin repaying the loan.

You also cannot consolidate student loans which have been previously consolidated, but you may do a student loan consolidation if you have a new loan to add. If, for example, you have finished your undergraduate studies and consolidated your student loans, but then go on to graduate school, you can get a new consolidation loan to combine all of your outstanding student loans.

Normally you must be either in the grace period of your loans, or currently making payments on them. The grace period usually lasts for six to nine months after you've graduated or left school. If you've already begun repaying your student loans, they must be current and in good standing before you can consolidate them. In most cases, student loans that are in deferment status can be consolidated.

If you decide to consolidate your student loans, remember that you can only do so once unless you go back to school and take out more loans.

One often overlooked benefit of student loan consolidation is that it can actually improve your credit. Your credit score is partially based on the number of credit accounts and outstanding loans you have. Too many can have an adverse effect on your credit. Consolidating your student loans will immediately reduce the number of accounts you have open, which will increase your credit score.

Consolidating student loans is not the right option for every college student and recent graduate, but in many cases it can be the best way to lower the monthly payments and simplify the repayment process. Combine this with an improved credit score, and student loan consolidation can be an excellent graduation present.

Author-Bio: Steven M Schultz lives in Loveland, Colorado USA For more Informationhttp://www.student-loan-consolidation-today.com