Reports show that the total annual cost of tuition and fees for private and public four-year institutions has risen between six and nine and a half percent each year over the past few years. The cost of a college education is very high and many people are turning to student loans to help get them through. The problem is that when you look at this trend and combine it with today=s uncertain economy, you see that many students, particularly those enrolled in professional curricula, are struggling to pay off their student loans. This is where consolidation can be really helpful.
Loan Consolidation – Something to Think About
Firstly, if you are currently enrolled in college and have student loans, it is important that you ask yourself whether or not you are borrowing too much. Are you confident enough that your starting annual salary after graduation will be greater than the cost of your student loans? If the answer is Ano,@ it is important that you familiarize yourself with a very important financial tool-consolidation.
In order to avoid defaulting on your student loans and the unsettling consequences that can include having a negative credit report, being sued, and being declared ineligible for future Federal aid, you need to look at student loan consolidation seriously. The Federal consolidation loan program allows you to combine two or more Federal student loans or parent loans that have different repayment schedules, and, generally, variable interest rates into one loan with a low, fixed interest rate. This is an excellent tool for making your student loan payments more manageable.
The consolidation programs available to you streamline the process so that you only have to make one monthly payment to one lender for an extended repayment term of 10 to 30 years, depending on the total amount of debt. Among some of the advantages of consolidation are: no credit checks or income verification, no additional fees or charges to pay, no collateral requirement, no annual personal income ceiling, and the availability of forbearance and deferments. Federal consolidation loans provide people with more flexibility in managing their large student loans and allow them to make better use of their starting incomes.
When you consolidate your student loans, you combine them altogether into a new blended, low fixed rate with a lower monthly payment. Given how low rates have fallen, many experts advise people who have consolidated to seriously consider doing so before the new rates come out. Consolidation loans are available from private lenders and the Federal government. No matter where you go to consolidate, the loans are all basically the same. There is, however, a lot of competition among lenders and a lot of incentives are being offered. Thus, take your time and shop around and find a lender who will give you the benefits and care you deserve.