Federal loan consolidation is indeed a boon for millions of students who take various types of education loans. Federal loan consolidation is extremely convenient, simple, and much more advantageous than other kinds of loans or debt consolidation programs. This program also works on the principle of merging multiple debts into a single debt. But it has several other attractive features / aspects that make it much more appealing to students. Let’s find out what makes federal loan consolidation so simple and beneficial an option.
Federal Backing
Unlike other debt consolidation programs, the U.S. government supports federal loan consolidation. That is to say that in case a student defaults in payment of consolidated loan, the government steps in and pays off the loan to the concerned company. Thereafter, the government recovers the due amount from the student. Now, this feature makes the student loan consolidation companies really enthusiastic in granting consolidation loans to students as the risk factor is eliminated for them. This also weeds out the usual requirements like credit check and employment / income verification. Most of the companies do not charge any kind of fee for student debt consolidation.
Benefits Galore
Graduates who opt for federal loan consolidation or student debt consolidation benefit from this ingenious idea in a number of ways. Firstly and obviously they get rid of multiple loans and monthly installments. This significantly reduces botheration and enables them to better concentrate on other affairs. Further, student loan consolidation companies calculate a fixed interest rate on the consolidated loan, thus ridding you of any worries pertaining to interest rate fluctuations because of inflation. If you deal with a genuine loan consolidation company, they mostly fix a lower rate of interest for you as compared to the rate of interest on your multiple loans. Thus, you can save thousands of dollars if you manage to get a really good deal. Basically it depends on the quantum of interest on your original loans and the kind of company you deal with.
Also, if you wish to, you can go for a longer period of repayment. The standard repayment period is 10 years. You can opt for a period as long as 30 years. This automatically leads to reduction of up to 60% in your monthly installment amount. Thus, it becomes much easier for you to pay the installments and spares a lot of money for you to spend on your other requirements / bills.
In addition to the above, you can also avail the facility of deferment or forbearance in case you face a financial crunch. Plus, there are no penalties for pre-payments i.e. you can even pay off your loan earlier than the scheduled period if you are in a position to do so. Federal loan consolidation companies do not impose any penalties in such cases.
Federal loan consolidation is a program intended to ease the pecuniary pressure on the graduate students. A number of student loan consolidation companies are offering multiple benefits to students by way of reduced rates for student debt consolidation.
Article Source: http://EzineArticles.com/?expert=Saurabh_K_Jain
No comments:
Post a Comment