| It is very often that students are encountered with | | | | federal loans the names of which deserves mention |
| the need to avail of loans in order to meet their | | | | include FFELP, Perkins, Health Professional Student |
| expenses. Sometimes, the loans might be taken from | | | | Loans, FISL, HEAL Guaranteed Student Loans, NSL |
| sources more than one. In the case of multiple | | | | and Direct Loans. |
| loans,the burden of monthly payment might be huge. | | | | The weighted average of the rates of interest of |
| And being a student, unless born with a silver spoon | | | | the individual loans in the consolidation package when |
| in one's mouth, it is natural that the financial backup is | | | | approximated to the nearest one eighth of a percent |
| not that strong. It is here that the idea of student | | | | as well as capped at 8.25 percentages will give the |
| loan consolidation assumes significance. Not only | | | | rate of interest of the loan after consolidation. The |
| would your monthly payment be reduced to a | | | | consolidation process is so structured that the rate |
| substantial level, but also you can save up some | | | | of interest will step up only in small amounts. It is |
| amount in the end. | | | | however to be noted that the weighted average will |
| These loan consolidation programmes can extend the | | | | not in any case transform the basic cost of the loan. |
| tenure of payment to a long period up to thirty | | | | Another point to be noted is that the new rate of |
| years. This is besides the lowering of the monthly | | | | interest will be somewhere in between the different |
| instalments that you have to remit in the bank. The | | | | rates of interest. Do not fall into the trap of those |
| process of consolidation of student loans is relatively | | | | who claim that the rate of interest will b lower than |
| similar to mortgage refinancing. The consolidation of | | | | the present ones. There are no costs involved in the |
| loans is applicable to most federal loans. Some of the | | | | process ofconsolidation. |