The Tips For The School Loan Consolidation

The school loan consolidation means, that a graduate have to collect the needed information and to discuss with the experts

. It is important to ask offers from several consolidators to be able to get a good contract. But the most important thing is to think, how you will plan your financial future and what role your student loans have in that plan.

1. Ask The Consolidator About The Fees.

Most students and graduates seem to think, that the two important factors in the process are the loan term and the interest rate. However, the lenders make big profits with all kind of fees.

If you have taken the private loan and you plan the consolidation, you have to ask from the consolidator, whether they will charge the origination fees, are there the prepayment penalties, what the maximum interest rate is and what the life of the loan will be?

2. Keep The Private And Federal Consolidations Separately.

There are important reasons for this. You cannot defer the private loan consolidation payments, if you go back to school. You can with the federal loan consolidation. If you meet a hard economic situation, you cannot avoid paying the private loan consolidation.

With private loans you cannot get the tax benefit as to the paid interests. You cannot apply for forgiveness on a private loan consolidation. If you will pass away, the private loan goes to the next kin, but the federal loans are forgiven. And finally, the private loans have generally the fixed interest rates, so you cannot lock the rate during a low rate period.

3. Does The Lender Require A Co-Signer?

If you are at the moment an undergraduate or recent graduate, your lender will require most probably a co-signer for a private student loan. This also depends on the principles of the lender and on the credit history of the borrower. However, in all cases the co-signer will make it surer that the application will go through.

4. What Is The Minimum Sum And How Long The Process Will Take?

Concerning the private loans, most lenders have a minimum sum of $ 5.000 for all the combined loans. The processing time is approximately 45 days.

5. Do I Have To Start The Repayment During The Application Process?

Concerning the private student loans it is recommended that you make all the repayments in time. This will give a good picture to the lender and assure, that your application goes through.

by: Juhani Tontti

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