Options With Student Loan Consolidations
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Congress has recently decided to change rules for student loan consolidations.
One of the changes effects the payment of student loan consolidations, both for federal and for private student loans. The payments will now be based on the student’s income. If a student can show that he or she suffers from ‘partial financial hardships’ then the payments made monthly on a student loan consolidation will be limited at about 15 percent taken from a students current income, instead of a set price for every student. This is a part of their College Cost Reduction Act along with their Access Act. Those changes will take effect the year 2009 as of July first.
For those students that spend at least ten years in what the government considers to be a qualifying public service position, for example teaching or maybe charitable work, then the remaining amount of a students current loans can be forgiven. Unfortunately, it is only with the loans that are funded directly by the federal government. This option became available for students on October first of the year 2007.
As of July 1st 2008, those students who move FFELP or Federal Family Education Loan in a direct loan program by using a loan consolidation plan can also qualify for the above.
Just pain consolidating student loans is also an option. A lot of the time students will consolidate funds in order to extend the amount of time they have to pay, and lower the monthly payments that they make. When they go to consolidate their loans, students have many things to look for, and many benefits they can get from consolidating their loans.
One reason why students use student loan consolidation is the escape from changing interest rates that randomly go up. Some are just looking to make fewer payments a month and a lower payment at that.
When choosing to use student loan consolidation, timing is essential. Instead of just picking one at the spur of the moment, a student should wait until after the US Treasury Bond Auction. This generally occurs in the very last week of May, and takes effect on the first of July. This usually gives each of the loaners to take a month to decide if it would benefit them to do consolidations under their current rates, or if it would be better to wait until the new rates take effect in the beginning of July. And it will give a student a chance to look for lower fixed rates.
Since private loans are not the same as federal loans, therefore these new rules that apply to federal student loan consolidation do not apply to private student loan debt consolidation. For this reason federal loans can be used only to consolidate the loans that are backed federally and private loans must be consolidated using other private consolidation methods.
If you are, or know a student who is currently looking for student loans, it is always better to use federal student loans, and federal student loan consolidation options. If you go to consolidate all of your loans you need to be sure to have two groups, one federal student loan consolidation and one for private student loan consolidation.
Watch the video related to student loan consolidation
Student loan consolidation is a great way to get a lower interest rate, as a reputable consolidation company will buy each loan off of the original lenders, lump it into one loan and offer lower interest and even deferment plans. Consolidate student loans to get them paid off more quickly with financial advice from a guidance counselor in thisfree video on student loans. Expert: Cheri Ashwood Contact: www.wearehdtv.com Bio: Cheri Ashwood has a bachelor’s degree in psychology and education …
Help answer the question about student loan consolidation
Which company has the best student loan consolidation rates?I have a subsidized student loan in the amount of $11,460.55, does anyone know the names of specific companies that have the best consolidation rates at this time? What are those rates?
Well maybe I should ask, "which company offeres the best incentives and rate deductions"?
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School loan consolidation doesn’t have to be a major headache. By doing research on the Internet and using free student loan debt consolidation resources you’ll be able to find a program that will save you money and headaches!
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You could get a regular bank Loan to pay them off, However your student Loan Interest is deductible from your Federal Income taxes, and a Bank Loan would not be, also the default rules are better for a student loan, you can also postpone student loans.
Without offering any legal advice, you may have issues of "diminished capacity" – your wife was having seizures and not fully able to comprehend, and "fraud in the inducement"- misrepresentation by the man on the phone of what company he really worked for.
This is a great reminder of the important lesson, NEVER do anything "over the phone" tell them to put it in writing and mail it to you.
Anyway, if you did call to cancel, most states allow a three day recission period for you to change your mind. Contact your states Consumer Affairs department for advice.
Also, have you advised, in writing, the original holder of the loan of your problem and that you were tricked into the consolidation, that should get some results.
good luck.
Thx for serving our country (soon to be). Honestly I would never consolidate with anyone other then the FED. Consider this, if you want to go back to school they will defer your repayment, a bank won't. With the FED you don't need a cosigner. If anything were to happen to you your co-signer would be responsible for your debt, but with a federal loan it would be zeroed out. If you have automatic withdrawls the fed will deduct I think .25 or.50% off your interest and plus they will take a few k $$$$ off your loans for making payments on time for 4yrs or something. The fed also has a repayment plan that goes off your income, odds are 1/2 that it will work for you. They have good programs, check into them. And w/ a federal loan you also get a 6 month grace period before you have to start repayment.
If your going into the Navy and you have a degree I would hope your going to be an officer, they should be paying off your loans for you anyway. Those sneaky lil bastards, you can tell your recruiter you will go to the Air Force if they don't pay off your loans. I do not know your situation, but if your degree will be used in military service to fulfill your duties, they better pay that off for you!!
Hope this helps and GL.
ylh:
I'm not going to comment specifically on your chances of being approved for a consolidation loan. If your credit is generally good, and your cosigner offers the security that the lenders are looking for, you certainly have a reasonable chance of being approved – but – as I'm sure you know, the lending market is REALLY REALLY tight right now, and many applicants with good credit are being turned away.
What I did want to comment on is the consolidation process in general. I just want to make certain that you recognize that loan consolidation has a "dirty little secret" – and that's all the extra money that you'll wind up repaying on your loan.
There is only one technique that consolidation loans can use to lower your monthly payments – and that technique is s-t-r-e-t-c-h-i-n-g your repayment term. You don't know have to know much about loans to understand what that means – the longer you stretch your repayment, the more interest you pay on your loan.
For the sake of argument, let's assume that you are hoping to consolidate $30,000 of private loans that will enter a 10-year repayment at 8.9% interest. Right now, you would be looking at 120 payments of $378.41 a month.
Consolidate that $30,000 into a 20-year loan at the same interest rate, and your payment drops to $267.99 a month – a savings of $110.42 a month. I'm sure you could put that extra $110 to good use.
But here's the catch – over 10 years, your total payments will be – $45,408.36. How's that compare to 20 years, where your total payments will be $64,318.53?
What's the privilege of cutting your monthly payment by $110 going to cost you? $19,000.
Wow – that's the list price on a Honda Civic, a Mini or a Pontiac G5.
Make that same deal on your government loans, and you're looking at another $15,000 in extra interest. That's quite a lot to pay.
Before you consider consolidation, take a look at your lender's other options, including Income Contingent Repayment, extended repayment, graduated repayment, and the brand new Income-Based Repayment. Do the math, and see which of these might make the most sense for you.
Don't be in a hurry to consolidate – that's just one of several options available to you, and it will prove to be a very costly one.
Good luck to you – graduation's not far away!
The only consolidation you can trust is your local bank or credit union. Some loans will allow you to go back to grad school but only if your payments have been in full and on-time..
Credit Unions are GREAT for debt consolidation. Go in and apply for a loan for the remainder of your student loans, and pay the loans off with that money. Then you'll owe the credit union a monthly payment. Make sure the APR is lower for the credit union than for the student loan itself. If you have a parent/significant other/other relative with great credit, see if they'll cosign – it will lower the interest rate.
http://loanconsolidation1.blogspot.com has good ideas and help for student loan consolidation and refinancing student loans
http://loanconsolidation1.blogspot.com
Sallie Mae will not consolidate loans if they are federal (student) and private together. What will end up happening is they will do two consolidations. (one for private and one for federal stafford) Who better to answer that but Sallie Mae…have her contact them and they can tell her in a matter of minutes what they can or cannot do. 1-888-2SALLIE (888-272-5543)
As far as for the rest of the question…here goes.
First off, she needs to go to a website to access all of her federal loan information.
http://www.nslds.ed.gov
This website is the U.S. Department of Education's database of students federal student loans. When she logs in…she will be asked for a pin number. If she doesn't know it, go to the FAQ section and follow the instructions on how to obtain one. DO NOT GIVE IT OUT TO ANYONE!! NOT EVEN TO FINANCIAL AID!!
Secondly, if Sallie Mae is her lender and she wants to stay with themthrough consolidation…she needs to get the facts. 1-800-448-3533 / http://www.smartloan.com
This will give her the information she needs on consolidation. She needs to make sure that one of the questions she asks is:
I want to consolidate my loans so I only have to make one payment a month but I do not want to lose any of my grace period. When is the best time for me to start the process of consolidation?
If Sallie Mae says no to consolidating the other loans…ask them if they can "combine them." Unless she would rather make 3-4 payments a month depending on how much they consolidate.
Keep in mind also that if she has a bank account and has an automatic withdrawal…she may be able to reduce her interest rate. I would have her ask Sallie Mae for details.
Not yet Disbursed. You are correct, the monies have not been sent to the school on her behalf yet. She needs to contact the school to find out if it has now been done or if they do not need it. Sometimes, the data on the databases does not get updated right away. The best way to find out is to ask her financial aid office. There may even be a final balance that the school is awaiting the funds to cover it. This is called a late disbursement. Best person to answer that is financial aid.