Student Loan Consolidation

Student Loan Consolidation Process

While you may feel as though all of your monthly student loan payments are adding up to enormous, almost impossible to pay amounts, there are fortunately a few rather flexible options that will allow you to get yourself out of debt and experience a much less stressful lifestyle. One of the best options for accomplishing this is done through student loan consolidation. Take a few minutes of time to read through the following material to get a better understanding of what is involved in the student loan consolidation process.

While student loans are an excellent source of financial help for students who require assistance paying their tuition, it can also create some immense debt, and sometimes require multiple loans to be opened up. Part of that immense debt occurs from the inability to make multiple payments every month, so the loan process begins by bundling all of your loans into one convenient loan package. This essentially pays off all of your loans and forms a single loan instead, often offering a lower interest rate.

But before you ink a student loan consolidation contract you will want to make sure that you are getting the best interest rate possible. You can find loan calculator tools here online that will help you figure out what your interest rate will probably be. The interest rate for your consolidated loan is calculated by averaging the interest rate of all the loans you will be consolidating and then rounding up to the next one-eighth of one percent. You should note that the maximum interest rate is 8.25 percent, so make sure you avoid an interest rate that is higher than this!

You should also know that there are a few points of criteria that you need to be able to meet in order to qualify for a student loan consolidation program. One of the primary criteria is that you are in your six month grace period following graduation or you have started repaying your loans. And the total of all your loans also needs to equal at least $7,500 (if they don’t then it is probably not worth you consolidating them anyway). And since the entire process revolves around multiple loans, you will also need to have more than one lender. And another requirement that often gets people into trouble because they assume they can simply continue to consolidate over and over again is that you can not consolidate your student loans if you have already done so. The only exception is if you can prove that you are going back to school and have incurred new student loans.

Student Loan Consolidation Student Loan Consolidation