Student Loan Consolidation

For many students, after they have graduated college it is time to start paying off all those student loans they received through the years. In most cases, you have six months after you have graduated or finished college to begin making the loan payments. However, as many recent students find out, they owe more than they imagined or believed, and they begin to struggle trying to keep up with all of the different payments for each individual loan.  Not to mention, it can become very frustrating to make payments to several individual loans knowing that you're being charged interest on each student loan!

There is an answer to this problem with student loan consolidation. Consolidation is the act of combining or consolidating all of your student loans into one easy to afford, easy to manage loan with a single interest rate. In some cases, you might actually save money, because once you begin paying your individual student loans, you may find that there are fees and variable interest rates that apply. With consolidation, the company may be able to reduce or eliminate these fees, saving you sometimes up to sixty percent on the total cost of your student loans.

Who can Apply for Student Loan Consolidation?

Any person with student loans can apply for consolidation if they meet certain criteria. This criterion will depend on the consolidation company. For the most part though, most student loan consolidation ompanies have the following guidelines for consolidation. You must be:

• Finished, graduated, or attending school less than half time
• Currently within the grace period for the loan or making repayments
• Entering your first student loan consolidation

If all of these situations apply to you, you are eligible for student loan consolidation. Many people choose consolidation because it can literally save their credit. In some cases, it is all too easy to forget to make your payments if you have several loans to keep track of. With consolidation, you will have one payment, which is easier to remember, and it will likely be lower than all of your current payments combine.

What types of loans can be consolidated?

Typically, only federal loans can be consolidated with federal loans and private student loans are not eligible under federal student loan consolidation programs. Here is a list of allowed loans:

• NSL (Nursing Student Loan)
• Federal Stafford Loan (Subsidized and Unsubsidized)
• HEAL (Health Education Assistance Loan)
• Federal Direct Loan
• FISL (Federally Insured Student Loan)
• PLUS (Federal Parent Loans for Undergraduates)
• Federal Perkins Loan
• SLS (Supplemental Loan for Students)

With any of the above loans, student loan consolidation is an option. What is great about consolidation is that you typically extend your repayment terms. For example, you might have fifteen years to repay a consolidation loan of $10,000. Whereas, you might get thirty years to repay a consolidation loan of $60,000. The amount you pay, as well as repayment terms will depend on how much you have to consolidate.