Student Loans are becoming increasingly popular nowadays. Parents are no longer worried whether they will be able to afford the huge education expenses if the child is keen on a higher education. If you think student loans are getting out of proportion creating stress, consider a Federal loan consolidation plan.
Types of Student Loans
The Federal student loan consolidation sanctioned by the U.S. education authorities are usually approved easily. There are the different types of Federal loans- Federal Perkins Loans, Stafford Loans, PLUS Loans. Federal loans come with a guarantee or reliability of the US government. These loans are popular because the borrower is eligible for tax deduction after the loan has been approved and the repayment has started. This gives the student and the parents, whosoever is shouldering the expense, the advantage of increased cash in hand. There can be situations wherein your child decides to go back to studies after a break. These loans boast of the facility of deferred payments incase the borrower decides to become a student again. The main advantage of these loans is that they can be consolidated! Yes, students can actually reduce their monthly expenditure by opting for Federal loan consolidation.
The other type of loan is the private loan. These are loans approved by private institutions like private banks. These loans cannot be consolidated under the same program as the Federal loans. Student loan consolidation has many restrictions and this is one of them. Yes, you may have two Federal loans and three private loans. You will have to keep the Federal loans in one program and the rest in another. Think this over before you opt for a private loan. Besides, private loans charge a higher interest than the Federal loans and credit history plays a major role in the approval. Do not rely on a private student loan if you have any doubts about your credit ratings!
Whichever loan you opt for, always consider loan consolidation if you are not sure about whether you will be able to manage multiple installments every month. Missing one payment can make your calculations go haywire! With Student loan consolidation, you can merge all your loans into one and take the trouble of remembering the details of only one loan. Moreover, you can actually save up to 40% every month in the repayments! You will have more money in hand to clear any non-educational debts that you incur! Not only will your credit rating improve steadily, you will also be eligible for other loans like auto loan.
Many companies in the U.S. offer great student loan debt consolidation programs. Always, opt for the Federal loan consolidation programs as they are reliable and time tested. Nevertheless, enquire before you commit to a debt consolidation. There may be loopholes that may mess things up for you once you finish your education and enter the job world. Keep a realistic estimation of how much you can afford to pay after your education. There are more monthly expenses in this world, in addition to paying off educational loans! You would not want to get a black spot on your credit ratings within the first year of your independence!
Student loan consolidation has many benefits. You can select a student loan consolidation program or a Federal loan consolidation to consolidate student loans and get free from the stress of servicing multiple student loans. Student Loans Debt Consolidation offers detailed information that could help you with the process of selecting the right student debt consolidation plan for you.
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