| Good students have to carry a lot of burdens on their | | | | reduce their payment amounts. |
| shoulders: they are responsible for studying hard to | | | | Of course, the drawback to consolidation is that the |
| earn the best grades they can. They have to find a | | | | total cost of the loan goes up, since more interest |
| way to pay their living expenses as they make their | | | | must be paid over the life of the loan. Still, this is a |
| way through school. And, they have to pay their tuition. | | | | trade-off that many grads in loan repayment are more |
| For many students, the only way to pay living | | | | than willing to make. In fact, consolidation can mean the |
| expenses and tuition while going to school full time is to | | | | difference between being able to make payments and |
| take out a student loan. That is because most families | | | | defaulting on the loans. Defaulting should be avoided at |
| these days cannot afford to pay for their sons and | | | | all costs, since student loan debt cannot be forgiven - |
| daughters to attend a 4-year college, a 2-year | | | | even in bankruptcy situations. |
| graduate school, or a 7-year medical school. | | | | Consolidation Loan: Lowest Rate For Student Loans |
| Thanks to federal student loan guidelines, students are | | | | Consolidation loans come in two flavors: federal and |
| not required to repay their loans while they are still in | | | | private. You do not have a choice as to which type to |
| school. And, most also are entitled to a short grace | | | | go with, however. Rather, you must choose federal |
| period after graduation during which they are not | | | | loan consolidation if you currently have federal student |
| required to repay their loans. However, eventually that | | | | loans like HEAL, Federal Perkins Loans, and PLUS |
| all ends and they must start making payments until the | | | | loans. Meanwhile, you need to go with a private |
| loans are paid off. | | | | consolidation lender if you currently hold private student |
| The situation is even harder for graduates who have | | | | loans. |
| taken out two or more student loans over the course | | | | When considering private consolidation loans, the |
| of their college careers. First of all, having multiple loans | | | | lowest rate for students can be obtained by shopping |
| means more monthly payments to make. But, it also | | | | around with multiple lenders. Note that, for private |
| means having to manage different payment cycles, | | | | student loan consolidation, your interest rate is based |
| pay to different lenders, and even deal with different | | | | upon the Prime Rate (or other published standard |
| repayment schedules. | | | | lending rate such as the LIBOR), plus a margin |
| Why Students Should Consider Consolidation | | | | determined by your credit score. Ultimately, the rate |
| With living expenses on the rise and jobs hard to | | | | you pay is up to each individual lender. |
| come by for many college graduates, making one's | | | | To get the lowest interest rate, you will want to: |
| monthly loan payments can be very difficult. This is | | | | 1. Make a list of at least 4 or 5 private student |
| particularly true when their loans have short repayment | | | | consolidation loan lenders. |
| schedules, such as 5 or 10 years. | | | | 2. Apply for loans from each one. |
| Savvy grads know that by consolidating their loans, | | | | 3. Take the best offer you can get. |
| they can actually not only simplify their monthly | | | | Remember that it is very much worth it to do your |
| payments, but they can actually reduce the total | | | | homework to get the lowest consolidation loan interest |
| amount they owe each month. Through the simple law | | | | rate: getting just a single point lower rate could save |
| of interest accrual, by choosing a longer repayment | | | | you tens of thousands in interest payments over the |
| period through their consolidation loan than they have | | | | life of the loan. |
| with their current loans, grads can actually significantly | | | | |