Student Debt Consolidation

College and University students are graduating with a pile of student loan debt

. Educational costs are raising every single year and it's only predicted to keep growing. According to the Federal Reserve, college student loans (federal and private) totaled nearly $830 billion in June 2010.

In the event your monthly student loans are starting to be unmanageable causing you to miss monthly payments or being overdue with payments then you are in real danger of being in default. Defaulting on a federal student loan will cause countless problems that you don't want. Your credit standing will be affected, your salary maybe garnished, your loan maybe forwarded to a debt collection organization, your salary tax return maybe seized, you could get sued by your loan company, and you maybe declined a professional license. This naturally all depends on your state regulations.

Before defaulting on a student loan, you will probably want to think of consolidating your loans. The primary objective to consolidating your student loan is to combine all your loans into a one loan with a reduce interest rate with one smaller monthly payment that you pay to a single loan company. You will also have the choice to pay off the loan over a extended period of time, hence lowering your monthly payment.

Loan consolidation is very similar to re-financing a mortgage loan or acquiring a home equity loan to consolidate credit card debt or pay off other high interest loans. Just about every type of federal student loan qualifies for loan consolidation. These kinds of loans consist of Perkins, FFELP, FISL, NSL, HEAL, Health Professional Student Loans, Guaranteed Student Loans and Direct loans. Loan consolidation is also readily available for private student loans. Nonetheless, you really should consolidate your federal student loan first if you also have private loan. Defaulting on a federal student loan will impact you a lot more than a defaulting on a private student loan.

An additional benefit with student loan consolidation is that there are no fees or expenses associated with consolidation. If you find a provider who wants to charge you fees, leave. Always go shopping around for the most beneficial deals.

What are the gains of federal loan consolidation?

Several of the main benefits are as follows:

* Doing business with a single loan company and just one monthly payment will make your debt less difficult to manage.

* You will have the ability to select from many flexible payment options (standard, graduated, extended, income contingent, income-based repayment plans).

* You'll be able to change repayment plans at at any time should your circumstance change.

* Lowered monthly payments to help relieve the difficulties of repayment.

Who's qualified for federal loan consolidation?

To qualify for federal consolidation loans, you need to have at least a single Direct Loan or Federal Family Education Loan (FFEL) that is in grace, repayment, deferment, or default status. If you are still in university you can't be included in a Direct Consolidation Loan.

May PLUS loans, Perkins Loans, Health Professional Loans be consolidation?

Yes

If more than one of my student loans is in default, will i meet the criteria for student loan consolidation?

If you are in default, your loan may still be considered for consolidation.

Exactly where do I get more advice on how to combine my federal student loan?

To help you consolidate your federal student loans check out http://www.loanconsolidation.ed.gov/.

by: p. birmingham

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