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Let's Make the Deal
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Consolidation can factor into your different repayment options. In order to consolidate your federal student loans, you must be in your six-month grace period or already repaying your loans. You have the right to consolidate a wide variety of college debts including:
- Stafford loans (subsidized or unsubsidized)
- Perkins loans
- PLUS loans
- Health Professions Student Loans (HPSL)
- Health Education Assistance Loans (HEAL)
- Nursing Student Loans (NSL)
- National Direct Student Loans (NDSL)
- SLS Loans (formerly ALAS Loans)
Loan consolidation should never be done on the fly, without some serious comparison shopping to make sure that you're getting the best terms and benefits from a lender. Ask what rebates, discounts, interest-rate reductions, and other perks a lender might offer you as a borrower prior to signing up with any institution. Before you consolidate with any lender, it's vitally important to make sure that consolidation is your best course of action. Consolidating loans can lower your monthly payments, but, as previously mentioned, it can also cause you to lose some benefits, such as deferment or forbearance privileges with Perkins loans.
Also remember that when you consolidate loans, the new interest rate you get won't necessarily be the lowest rate you currently have. Rather, any new consolidated loan you get will be a fixed, weighted average based on all the loans you consolidated. The interest rate will be rounded up to the next Vs percent from that weighted average, and capped at 8.25 percent by federal regulations. While you can't consolidate private loans through the federal loan consolidation, you can consolidate federal loans that are in any repayment plan—whether they're currently paid via the standard, extended, graduated or income contingent method. And when you consolidate any of these loans, your repayment plan will be anywhere from 10 to 30 years, depending on the amount of your debt.
If you're having difficulty with your payments, and you're in the process of consolidating loans, you can ask for your lender to temporarily stop your payments while your consolidation loan is being processed, giving you a little wiggle room financially.
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Article Title : Let's Make the Deal |
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