Student Loan Consolidation Companies - How to Choose the Right Company For You

Student loan consolidation is a way for graduates toHere are several Federal Loans:o Perkins Loans are
have all their student loans combined into one loan.funded by the government. They carry a very low
This loan is handled by one creditor. The creditorinterest rate but are need-based, a financial officer
pays the multiple loans in full, leaving the student towould determine if a student is eligible.o PLUS Loans
pay for one new loan. Students no longer need toare for parents of undergraduate students. There are
pay multiple student loans with separate billing cycles,also PLUS Loans for students as well. Payments on
dates or interest rates. They now have one loan andthis plan will begin once this loan is approved. PLUS
one interest rate, to be paid to one creditor.loans allow you to take up to 10 years for
When considering loan consolidation. You should dorepayment. Commercial banks and online lenders
the research. First know the terms of agreement,offer PLUS Loans for both parents and students.o
monthly payments, and interest rates for each loanStafford Loans offer a low interest rate. They do
and creditor before looking for a loan consolidationnot raise their interest rates any higher. Stafford
company or program. When selecting a company orloans do not require a student to pay any interest
program, make it a point to compare them; knowwhile at school and are not required to pay the loan
their terms of agreement, interest rates andin the six months after graduation. It offers 10 years
obligations. Once you have carefully selected afor repayment.
company or program you feel is suitable for youHere are a few private companies that offer Loan
provide them the information you had gathered.consolidation:o Loan Approval Direct offers interest
There are Federal and Private Student Loanrates as low as 3 percent. Reducing a student's
Consolidations. Federal Student Loan allows a studentmonthly loan to as much as 60 percent.o SLM
to have all their Federal loans combined into one newCorporation or commonly named Sallie Mae. Sallie Mae
loan.offers a range of options depending on the type of
The government provides Federal programs such as:oschool or what education program a student would
The Federal Family Education Loan Program (FFEL).have. Such programs include Federal Stafford Loan,
FFEL will soon be replaced by the Direct LoanParent PLUS Loan, Graduate PLUS Loan, Sallie Mae
program and Pell Grant and the Federal DirectSmart Option Student Loan, Continuing Education
Student Loan Program (FDLP). These programs allowLoan and Career Training Loan.o Citibank provides
students to have their loans from Stafford Loans,programs such as CitiAssist Undergraduate and
Federal Perkins Loans and PLUS Loans combined intoGraduate Loans, CitiAssist Health Professions;
one Federal loan. These are fixed-rate loans backedCitiAssist Residency, Relocation and Review Loans;
up by the U.S. Government, offered to students andand the CitiAssist Law and CitiAssist Bar Exam Loans.
parents.o The Federal Direct Student Loan ProgramStudents receive a 0.25% interest rate reduction in
(FDLP) was created by the U.S. Department oftheir auto-debit payment program. These programs
Education in effort to assist parents and studentstake up to 20 to 25 years to repay.o EdFed is
with their loans.another private company. By selecting one of their
Private Loan Consolidation is combining privateplans a student can lower their monthly payment by
student loans into one new loan. Before consideringas much as 60 percent. They also provide
private loan consolidation, apply for a federal loan, theinterest-only payments. The fixed interest on EdFed
reason for this is to better maximize federal loansis the weighted average of the interest rates of the
that are available. Private companies such as Sallieloans a student consolidated, rounded to the nearest
Mae recommend it.1/8th percent.