| You might have heard of student loan consolidation | | | | but keep in mind that with each passing months, the |
| already and have wondered what it is actually about. | | | | interest rates are also building up. It might seem that |
| There may still be a lot of questions in your head but | | | | you save each month by paying less, but you still |
| as you read on, hopefully, you will grasp the basic | | | | lose a lot of money to the interest. On the other |
| information about student loan as commonly asked | | | | hand, since student loan consolidation has no penalties |
| questions are being provided with answers. | | | | for paying off your debts early, then you can make |
| Question 1. What is student loan consolidation? | | | | larger than required payments once your income |
| Student loan consolidation, also known as private | | | | increases. |
| student loan, is the primarily merging of all your | | | | Question 5. Should I consolidate if all my loans are in |
| outstanding loans into one single loan. This has a fixed | | | | one location? |
| interest rate, usually much cheaper that the overall | | | | You don't have to but if you want to, you can. The |
| interest that you are paying, and is handled by a | | | | lender will simply repackage your loans so that they |
| single lender. | | | | will have the above mentioned characteristics. If you |
| Question 2. What makes student loan consolidation | | | | only have one lending company, this may limit your |
| different? | | | | options on who to consolidate with. If you are still a |
| Student loan consolidation is unique in the sense that | | | | student and you need to have another loan, try |
| it has certain benefits that only comes with student | | | | getting loans from other lenders so you will have |
| loans. For instance, the interest rate for consolidating | | | | more choice when you graduate. |
| your loan might be tax deductible. There is no | | | | Question 6. How do I know my interest rate? |
| greatest possible amount available, and you have a | | | | Some statements will show you the rate of the loan |
| repayment term you can potentially defer or | | | | so try checking on them. If it's not there, you can |
| postpone temporarily. And if ever a borrower dies, | | | | always call your lender and ask. Be sure to have all |
| debt is fully discharged. | | | | the rates if you still have multiple loans. The interest |
| Question 3. Why might I consolidate? | | | | rate for a consolidated loan is based on the overall |
| The main reason to consider consolidating are the | | | | interest rate of your existing loans. |
| following:o rolls all your student loans payments into | | | | Question 7. Can my spouse and I consolidate our |
| one monthly billo locks in on a fixed, usually lower, | | | | loans together? |
| interest rate for the term of your loan, potentially | | | | Yes you can, but it might be a bad idea. For one, if |
| saving you thousands of dollars (depending on the | | | | you want a deferment, both of you should meet the |
| original, overall interest rates of your previous loans)o | | | | criteria. If one of you dies earlier, then the other is |
| potentially flexible repayment options during hard | | | | obliged to pay off the deceased's debts. If later on |
| times with no fees, charges or prepayment penalties | | | | you separate or divorce, you will still have to pay the |
| You should consider consolidating your loans if it has | | | | loans off together. |
| a lower interest rate, without a question, compared | | | | Question 8. When should I consolidate my loans? |
| to the ones you are currently paying, most especially | | | | It is best to consolidate your loans during the |
| if you are having a hard time coping up with your | | | | sixth-month grace period. By then you will get a |
| monthly payments. On the other hand, if you are | | | | lower interest rate. However, it is wise to consolidate |
| close enough to paying off your existing loans, then | | | | your loan on the fifth month of your grace period so |
| consolidation is not worth it. | | | | you will not lose the rest of the grace period. |
| Question 4. What are some pitfalls for consolidating | | | | Question 9. Where can I get a consolidation loan? |
| your student loan? | | | | If you are satisfied with your current lender, then |
| Because you can actually extend your repayment | | | | you can consolidate with them. If it's a bank, call |
| term, you can make smaller payments in each month. | | | | them up and ask what they can do for you. |