| Loans availed by students for the purpose of | | | | right to consolidate first. On his refusal you can look |
| financing their education generally ends up becoming | | | | out for other lenders.o Where the loans are taken |
| totally unmanageable both in terms of liability and | | | | from different private lenders, you can directly |
| their repayment. This is when the concept of | | | | proceed to consolidate it with a different lender |
| reconsolidation aptly solves the problem. Under | | | | altogether.o Consolidation can be done either at the |
| reconsolidation all the loans are aggregated into a | | | | time of graduation or six after completion or after |
| single loan with a single monthly payment of liability. | | | | having started to repay the loans.o Interest rates on |
| This not only reduces the monthly liability but also | | | | Federal Consolidation can be as low as 5% to 7%o |
| provides flexibility in repayment, thereby enabling | | | | Rates are lower when you are still a student.o Rates |
| improvement in credit score. | | | | on Stafford and PLUS loans change every 1st of July. |
| Different Types of Reconsolidations: | | | | Law specifies maximum rate of interest on these |
| There are basically two kinds of reconsolidation | | | | loans.o You are entitled to a loan forgiveness |
| namely Federal and Private. Federal Consolidation is an | | | | program provided you perform certain specified |
| easy process and maintaining a decent credit score | | | | services.o Federal loans can be consolidated only |
| makes it all the more simple. Private Loan | | | | once. While private loans being regular loans are |
| Consolidation is complex involving thorough | | | | consolidated at the discretion of the lender.o Locating |
| verification of the credit score. The interest rates are | | | | a lender for consolidation is left to the student. Hence |
| high when compared to Federal Loan Consolidation. | | | | it would be worthwhile to handover the task to an |
| Rules on Reconsolidation: | | | | agent.o You can repay your debt faster by increasing |
| The following rules are to be observed before | | | | your monthly payment and specifying that it is |
| proceeding for consolidation of your loans.o The | | | | towards the principal.o Timely repayment enables you |
| outstanding student loan balance should be minimum | | | | to avail certain discounts on interest rates.o Federal |
| $7,500.o No fee charged for Student Loan | | | | Loans cannot be consolidated with other kinds of |
| Consolidationo Where the student's loan is taken | | | | loans, while private loans can. |
| from a single private lender, he should be offered the | | | | |