| Smart college students and grad students know how | | | | federal consolidation loan program, the new loan will |
| to any number of impressive things, like write a sonnet, | | | | always have a fixed rate. The loan will be contracted |
| understand complex physics equations, or speak Old | | | | with a government-approved financial institution. The |
| Norse. However, no matter how wise they have | | | | bank rate for a federal consolidation student loan is |
| become while receiving their higher education, many | | | | calculated as the weighted average of the person's |
| college graduates remain puzzled as to how to get a | | | | existing loans, rounded up to the nearest 0.125% (with |
| handle on their student loan payments. | | | | a cap of 8.25%). |
| Why Repayment Is So Challenging | | | | Meanwhile, private student loans work a bit differently. |
| Most individual student loan programs have repayment | | | | These loans will be contracted via any number of |
| schedules of up to 10 years. This relatively short | | | | private student loan consolidation firms competing in |
| repayment schedule squeezes into a relatively short | | | | the market today. Unlike with the federal programs, the |
| period of time payments for what can amount to tens | | | | rate for these loans is calculated based upon the |
| or hundreds of thousands of dollars in loan debt. The | | | | borrower's credit score. The final rate offered is a |
| result: very high - and sometimes unmanageable - | | | | function of the person's credit score and the LIBOR or |
| monthly payments. | | | | prime index (depending upon the lender). |
| Students are particularly challenged in repaying their | | | | Tips On Getting Good Bank Rates On A Consolidation |
| loans given the current state of the world economy. | | | | Loan |
| Jobs are more scarce than usual in many sectors - | | | | If you are going for a private consolidation loan, here |
| even for these well-educated grads. And, with living | | | | are some tips for getting yourself the best rate: |
| expenses showing no relief in sight, managing those | | | | 1. Contact Multiple Lenders: As with anything else in life |
| regular loan payments is very challenging. | | | | or business, the more choices you have, the better |
| What can compound the problem is when students | | | | your chances of finding the best-possible situation. Find |
| have multiple loans with different lenders. Holding | | | | at least 5 private student loan consolidation vendors |
| multiple loans means having different payment due | | | | online. |
| dates each month. It also means paying different | | | | 2. Compare Rates And Offers: Apply for loans from |
| interest rates on the various loans, while at the same | | | | each of the lenders. You may be surprised to see that |
| time having different repayment schedules. This | | | | the various offers may vary significantly in their terms |
| situation makes it hard to plan for one's financial future. | | | | and rates. Good for you - this means more choices. |
| Defining A Consolidation Loan | | | | 3. Select Best Overall Offer: Of course, you will want |
| A consolidation loan for students is a single loan that | | | | to select the best offer. Be sure to look not just at the |
| one uses to repay all existing, outstanding student | | | | interest rate, but at the other terms such as whether it |
| loans. The new loan results in the borrower having to | | | | is a variable or a fixed rate, as well as your repayment |
| make only one payment each month - rather than 2, 3 | | | | schedule options. You want the loan that keeps your |
| or more as before. Also, consolidation loans allow for | | | | payments as low as possible, while at the same time |
| longer repayment periods of up to 30 years. This | | | | does not cost you too much in interest payments over |
| drives the total monthly payment amount down as | | | | the life of the loan. |
| compared to before consolidation. | | | | Do your research on bank rates on a consolidation |
| Federal Versus Private Consolidation Loans | | | | loan and you will be rewarded with a money-saving |
| The rules and terms for federal consolidation loans and | | | | loan offer that can save you thousands over the life |
| private consolidation loans are a bit different. Under the | | | | of the loan. |