College loan consolidation offers financial relief to post graduates indebted with multiple education loans. When students are late with payments or default on loans their credit rating can quickly be ruined. Graduates with poor credit will find it difficult to purchase a car, buy a house, or obtain credit cards.
Post graduates have to options for college loan consolidation. Students with private student loans can apply for a consolidation loan through a bank or credit union. Private education loans involve funds borrowed from banks, credit unions, SallieMae, or credit card companies.
Students with federal student loans can refinance through a variety of college loan programs. Federal college loans include Federal Direct, Federal FFELP, Perkins, Stafford, andParents PLUS. Consolidating multiple federal loans can lower monthly payments, reduce interest rates, and eliminate the need to track multiple payment dates.
With consolidation, students must apply for a new loan to pay off outstanding balances of all federal and private education loans. Student loan consolidation can be particularly beneficial for post graduates who carry excessive college loans such as chiropractic, medical or law school.
By consolidating college loans, graduates can eliminate multiple loan payments. Instead, borrowers are only responsible for one payment with an established interest rate. Loan consolidation can extend payment terms to further reduce the monthly payment amount.
Post graduates often find it difficult to maintain college loan financial obligations and paymentschedules. Students with subsidized loans are exempt from paying interest while attending college, during grace periods or deferments. Subsidized student loans include Federal Subsidized Stafford Loans and Direct Subsidized.
College students with unsubsidized education loans are required to pay interest from the date the loan goes into effect and until it is fully repaid. Unsubsidized loans include Federal PLUS, Direct PLUS, Direct Unsubsidized and Federal Unsubsidized Stafford Loans.
Graduates with SallieMae loans are only required to pay interest payments while enrolled in college. Upon graduation, borrowers must adhere to their chosen payment plan. Post graduates with Direct Loan payments must abide by federal guidelines and established grace periods.
Multiple options exist for college loan consolidation. Borrowers should consult with a tax advisor or financial planner to determine if loan consolidation is the best choice.
One of the most utilized sourcesfor obtaining college loan consolidation information is Federal Direct Consolidation Loans at LoanConsolidation.ed.gov. Visitors can utilize student loan calculators to determine monthly payment amounts; obtain step-by-step instructions for the loan application process; and review a complete list of frequently asked questions.
College loans cannot be discharged through bankruptcy, so debtors must find a way to maintain payments. Defaulting on education loans adversely affects credit scores and will be reflected on credit reports for seven years. In order to maintain good credit, students must pay loan payments on time and in full until the education debt is paid in full.
Graduates experiencing extreme financial hardship might be allowed to restructure student loans by filing Chapter 13 bankruptcy. Debtorsshould consult with a bankruptcy lawyer to determine if they qualify for this financial provision. Filing bankruptcy to restructure student debt should only be used as a last resort.
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