Consolidation Advice

Unable to meet your education expenses, you are bound to accumulate student loans. Next, once you complete education, unable to meet your student loans, most of you are bound to turn towards consolidation of your student loans. Some of the valuable advice given here will help you to tide over your consolidation troubles.

What is consolidation of student loans?

Consolidation is the process by which your education loans from various lenders are combined under one particular lender. Next, the term of the loan is extended to a long duration and an interest rate is decided. Now, this will lead to a monthly repayment which will be lesser than you previous one by half or more. Thus, it reduces the burden on your shoulders.

When should you consolidate your loan?

There is no time deadline to consolidate your loan if you are opting for a private lender. However, federal lenders have a yearly deadline. Never rush into consolidation. The best advice would be to go in for consolidation only if you seem to be approaching default because of a serious financial crunch.

With whom should you consolidate your loan?

It makes no huge difference as to the person with whom you consolidate your loan in the case of private or federal lenders. The main thing to remember is that lenders are very shrewd and cunning. It is a serious case of 'caveat emptor' - 'Let the buyer be aware'. Therefore, do the groundwork and research about the various lenders before opting for one.

How to obtain a consolidation loan?

The simplest reply to this question is by filling out the application form. However, before doing this find out the eligibility criteria of the company and see whether you satisfy the same. Otherwise you will waste your time and effort by filling out ineligible application forms.

What are the other things I should look out for before consolidating my student loan?

Like I said, lenders are very cunning and they may introduce some extra charges into the fine print of the agreement. So read the entire agreement clearly and understand the same clearly before signing the agreement. If you are not clear about any of the terms, ask the lender to explain or rewrite it in simpler terms. The lender has a duty to explain things to you. Therefore, do not hesitate to raise any queries that you have.