| As the cost of college education increases, many | | | | consolidation as it would result is a loss of the |
| students and parents turn to college student loans to | | | | benefits that come with federal programs. |
| help tackle the cost. Covering the cost of tuition, | | | | If a student has borrowed more than $5000 in |
| dorms, books, transportation, food and other | | | | private loans or if the existing student loan debt |
| expenses is often times a difficult challenge for | | | | exceeds 8% of the student's income, they should |
| students to overcome. | | | | consider consolidation. |
| As students take on financial aid in the form of | | | | Factors to be considered before making a final |
| student loans, it's not uncommon for a single student | | | | decision on consolidation include: |
| to have multiple loans as they move closer to | | | | - Lenders |
| graduation. Payment becomes due after a six to nine | | | | - Interest rates |
| month grace period which begins at graduation. | | | | - Total loan payments |
| Consolidation can be a solution that reduces the | | | | - Credit history |
| financial stress of managing multiple student loans as | | | | - Payments remaining on original loans |
| they come due. Private school loan consolidation is | | | | For some students, the ease of managing a single |
| the process of combining multiple private student | | | | payment is the most significant benefit of private |
| loans (as opposed to federal) into a single | | | | school loan consolidation. While it is true that loan |
| consolidated loan. | | | | consolidation will reduce monthly payments, it will also |
| The main purpose of obtaining a private school loan | | | | lengthen the terms of re-payment, thereby increasing |
| consolidation is to lower monthly payments, reduce | | | | the overall amount of interest paid over the life of |
| the interest rate and extend the terms of | | | | the loan. |
| re-payment. Re-payment terms are normally from | | | | The student must decide which works best for him |
| ten to thirty years. A fixed interest rate can also be | | | | her - lower payments over a longer period of time or |
| obtained which is advantageous. If a student has all | | | | getting out of debt earlier by paying off the original |
| federal loans, they should not use private | | | | loans on time. |