Student Loan Consolidation

Most who’ve “been there, done that” would agree that the hardest part of securing a federal student loan debt consolidation is qualifying for it.  After that, the process is easy.  So to find out if you have eligibility for federal student loan consolidation, you’ll need the information required and to have your ducks in a row before you apply.

The first requirement for federal student loan consolidation eligibility is to be finished with school.  So if you’re still in school, you do not qualify.  Alternatively, you can have dropped out or be a half-time student.  If you’ve graduated, you need to have fully disbursed, meaning you have finished all coursework and requirements and received your graduation paperwork and diploma.

The easiest of the student loan debt consolidation options from federal loans is if your loans were PLUS loans.  These can be consolidated immediately upon graduation or leaving school.  Most other federal student loan consolidation eligibility loans require that you be done with school for a specific amount of time (usually 3-6 months).

If you have received Direct Consolidation loans in the past or have a Federal Family Education Loan (FFEL), then you will likely have eligibility for federal student loan consolidation.

Interest rates for federal loans are capped (currently at 8.25%), so they cannot go higher.  If your loan interests are considerably lower than this, you might want to think twice about consolidation.  The good news is that the lower interest rate you currently have may be variable or subject to change annually.  If that’s the case, know that the lowest student loan interest rate may be offset by the fixed rate of the federal consolidation–the rate you get now will be fixed for the lifetime of the loan, no changes.  If your credit is good and you don’t anticipate it getting much better in the next few years, this may be a good deal.

Whatever your needs, talk to your financial adviser before making any decisions about federal student loan consolidation eligibility.

If you’ve been in school for a couple of years or have recently graduated, you have likely begun receiving information on student loan consolidation.  Most students who are about to graduate to have just graduated are seriously thinking about student loan consolidation and how they can get the best deal.  For most, the only financial decision of greater import in their lives will be the purchase of a home.  Students loans, on average, total $20,000-$40,000 per student with many higher-level graduates’ loans being even higher.

What most students don’t fully appreciate or understand is that their loans began accruing interest from Day 1.  The deferment was for payments to be made towards paying it back, but did not stop interest from building during the time of the loan.  So if you’ve been in school for five years and you took out a loan for your first semester’s tuition, that loan has been collecting interest for five years.

Many students are unaware that student loan debt consolidation doesn’t have to wait until you’ve graduated.  You can consolidate older student loans into new loans to take advantage of better interest rates.  Ask your financial adviser about this option and see if the lowest student loan consolidation rate today might help your higher-interest loans from yesterday.

Whatever your situation, there are a lot of student loan consolidation options available to you.  Most student loan debt consolidation can give you an easier-to-manage portfolio of debt, can help with loans that you’ve defaulted or missed payments on, and can even buy you extra time before repayment is required.

Again, check with your financial adviser and see what student loan debt consolidation options are there for you.

When students finish school, after having financed their education through federally-backed student loans, they are often faced with 5, 6, even 10 or more payments per month: one for each loan taken.  This is unwieldy from a bookkeeping and personal finance perspective, but there’s more to it than that too.

Those loans are probably at a relatively high interest rate, which can often be remedied with federal school loan consolidation options.  There are two such options: the Federal Family Education Loan Program (FFEL) and the Direct Consolidation Loan program (DCL).

The FFEL student loan consolidation plan is for consolidating FFEL loans specifically, though some lenders participating may be willing to combine other government-backed loans in this student loan debt consolidation program.

In a DCL student loan consolidation, all federal student loan programs must be considered for consolidation, including those which may have defaulted or missed payments.  The DCL, however, does not give the lowest student loan consolidation rate available, but it can have payments tailored towards income rather than loan amount.  So for those who have fairly heavy loan debt, this can mean a difference of monthly payments in the hundreds of dollars.

With an FFEL federal school loan consolidation plan, the interest rate is often lower, but the total amount of the loan is always a factor when working out monthly payments for the loan.  In the longer term, this is the better option for most people, because of the lower interest, but for many just starting out in the workforce, monthly payment options are more important for the near term.

Earlier here at Student Loan Consolidation Info, we talked about the differences between private and federally-backed student loans and consolidations.  When you look for the lowest student loan consolidation rate, you are going to be looking for private loans, rather than government-backed options.

One of the leading institutions for private student loan options is Chase Bank.  The process of getting a Chase Bank student loan consolidation is not difficult and can greatly reduce both your debt load and simplify your payments.  Often, these will also mean a lower monthly payment and the Chase student loan debt consolidation usually improves credit while lowering the interest rate overall.

Some of the things that make Chase student loan consolidation better than others would include the waiver of origination, processing, and repayment fees often associated with consolidation. There is no prepayment penalty if you choose to pay your loan with Chase early, nor is there a penalty for making extra payments.  This is definitely worth being on your list of requirements for the lowest student loan consolidation rate.

The application process for Chase Bank student loan consolidation is simple and opens up at around graduation time every semester.  Applications are considered on several merits, but Chase student loan consolidation plans are generally easy to qualify for.

These loans are, of course, subject to credit approval.  Being one of the largest banks, however, Chase student loan debt consolidation is usually simpler and easier than with smaller, less well-financed institutions.

Nearly every graduate out there faces the same dilemma: you’ve just graduated and you’re looking for or just starting a new job.  Looming ahead are student loan repayments you’re going to have to start paying in just a few months.  At that point, you’ll probably be looking at student loan consolidation and are facing the prospect of hundreds of dollars a month in loan payments.  Not fun, but don’t panic because there are some ways to pay down or even eliminate student loan debt without money!

You can get student loan forgiveness from the federal government by participating in a student loan debt forgiveness program.  These usually involve volunteer work, military service, teaching, voluntarily practicing medicine, and more.  Often, for instance, recently-graduated doctors will practice their internship in at-risk community hospitals.  They get both the experience required for licensing as well as Perkins loan debt forgiveness.

Many other opportunities are also available.  Those who join Teach for America, Americorps, the Peace Corps, and Volunteers in Service to America (VISTA) are often given student loan debt forgiveness that removes a large chunk or even eliminate student loan debt.

Military service is another option and many will find that two years in the National Guard can pay off more than half of their loans, resulting in significant student loan forgiveness.  You can even have your student loan consolidation include a waiver of payment until your service is complete, which means that during your time in the National Guard, you pay nothing towards your loans.

Teaching full-time in low-income communities through Teach for America and similar programs is another great option that pays 15% of your loans for the first two years and 20% for the next two, with 30% the year after that.  So in five years time, your loans are 65% paid, resulting in some great student loan forgiveness.  Often, school districts or local/state offices will pay the rest as well.

There are some great opportunities for paying down or eliminating your student loans with student loan debt forgiveness programs.