School loan consolidation provides you an opportunity to merge all your loans and pay only once for all of them. There are a number of options catering to almost everyone’s needs. These options are divided into the following two major categories:
Federal loan consolidation
Private loan consolidation
This type of school loan consolidation provides financial help to those who are enrolled at schools that participate in federal aid programs. By school we mean a two-year or four-year degree awarding public or private college, university or trade school Title Loans Tampa.
Consolidation can help reduce your student loan debt by fixing and reducing the interest rate on your loans. This loan option will also combine your separate loan debts into one package thus managing your debt paying options.
Eligibility for federal loan:
In order to qualify for federal consolidation, one should check out the following things before applying for it.
The candidate should no longer be enrolled in school (defined as being enrolled less than half-time)
You must be in the ‘grace period’ of the loan or must be actively repaying your loan.
Most consolidation companies require a minimum loan amount i.e. $10,000 is typical.
Types of Federal Loan:
Federal Family Education Loan Program: These are public-private loans aimed to deliver and administer guaranteed educational loans to parents and students. It provides the following types of loan for post-secondary education:
Stafford Loan: Stafford loan consolidation is a fixed-rate refinancing program that combines all your existing federal loans into one new loan.
PLUS Loan: PLUS loan consolidation is another form of federal school loan that allows you to pack all your PLUS loans previously taken to finance your kid’s education, into a single loan with a lower monthly payment.
Graduate Stafford Loan Consolidation: Graduate Stafford loan consolidation is a great financial tool for those who have recently graduated and are trying to pay off their graduate Stafford loans.
Federal Direct Consolidation Loans: Federal direct loan consolidation is a practical repayment tool that enables you to combine all your Federal Direct student loans into a single loan. Federal Direct loan offers the following consolidation options:
· Direct Subsidized Consolidation Loans: Thiscombines federal student loans eligible for interest subsidies, such as subsidized FFELP, Direct Loans and Federal Perkins Loans.
· Direct Unsubsidized Consolidation Loans: Thiscombines federal student loans not eligible for interest subsidies. If any one of the loans to be consolidated is unsubsidized, then you are eligible for Unsubsidized Direct Consolidation Loan.
· Direct PLUS Consolidation Loans: Thiscombines FFELP PLUS and Direct PLUS loans.
Benefits of Federal Loan:
Various benefits can be availed if you opt for federal program. Some of them are stated below:
Reduces monthly payments
Provides fixed interest rates
Requires only one payment every month
Improves credit rating
Offers flexible payment options
No pre-payment penalties
Disadvantages of Federal Loan Consolidation:
If compared to the benefits, consolidation has lesser disadvantages, which are mentioned below:
Takes long to pay back
Increases the total amount of loan
Locked interest rates i.e. if interest rates go down, your rate will not decrease/change
Lose benefits (if any) from previous loans
2. Private loan :
The purpose of private loan consolidation is more or less the same as that of federal loan consolidation but the procedure and features differ. It combines only your outstanding private education loans into one package. Private loans cover educational expenses like tuition, accommodation or any other educational expenses.
Eligibility for private loan consolidation:
As there are few eligibility rules to qualify for federal loan consolidation, similarly the private loan levies some regulations on every application that it receives for necessary approval. These criteria are mentioned below:
The candidate should be atleast half-time enrolled in a degree or technical/diploma program
Have a minimum of $10,000 in private educational loans
Is in repayment status of private education loans at the time of application
Have good credit standing
Have proof of accommodation and present income
You will have to settle the amount of the loan and the interest payable to the repayment period as stated within the mortgage agreement. The repayment date is usually your own payday, thus the name pay day advance.
The repayment will probably be accumulated by the financial institution from debiting the bank account that you enrolled at the applying procedure, that could be the bank accounts into that you obtain your salary paid.
Repayment within an extended interval
Payday loans could be extended in the event that you discover your self in a place to struggle to meet part or all of the sum on account of the repayment period. If it happens it’s strongly suggested that you contact your pay day advance provider when you can and explain your situation to them. They’ll subsequently have the ability to spell out your options and just how exactly to begin stretching your loan.
Even in case you aren’t in a position to totally repay the repayment sum, it’s highly advisable to cover off just as far as possible regarding the repayment period. This will assist you to maintain the quantity of attention your debt to the very least. Some businesses might ask you for additional fees for expanding your loan, so you ought to check if that really is actually the case before signing your loan agreement.
Correctly regulated paydayloan businesses must stick to strict legislation regulating the fund market.
Just like any financial product that you put in your application for this is definitely a good idea to test that the company offering the mortgage is suitably regulated. The pay day advance business you’re employing to should present its Consumer Credit Licence number within its loan requirements also it also needs to be authorised by the Office of Fair Trading. If you’re in any doubt concerning if the pay day advance company you’re thinking about signing up to will be fully regulated afterward you’re in your rights to get in touch with either of those bodies to get additional info.
Provided that the pay day advance business you’re employing to will be correctly regulated, there’ll be no recognized figure to make almost any complaints you might need to and you could rest sure that you won’t be susceptible to some unjust techniques.