When a graduate plans the student loans consolidation, he has to remember that the question is about his or her total financial planning and life planning. The consolidation is not a magic trick to swipe away all the financial problems. It can even worsen them, if made with unsufficient information. I have collected into this article the main topics, which you have to think.
1. You Have To Make The Student Loans Consolidation During The Grace Period.
The Grace Period is the 6 months period after your graduation. During this period you will be free from the repayments. This is the time, which the Federal Government has ordered for the consolidation and they have even granted benefits for those who do it, for instance a 0.6 % reduction in the interest rates for the whole loan running time.
2. Why The Student Loans Consolidation Can Reduce The Monthly Bill Even By Over 50 %?
When you think it, its natural. People, who are studying have zero negotiation power with the lenders, i.e. with the banks. The lenders will dictate the terms. But when the student has graduated, and in some cases got a job, his status will be totally different. He can even shop around for the best consolidation deal.
This means lower interest rate, because the rate reflects the amount of risk for the lender. If at the same time the running time will be lengthened, the monthly reduction can be even over 50 % compared to the situation, when the graduate will do any changes.
3. Can You Consolidate Private And Federal Loans?
Nope. The only way is to consolidate all the private ones and all the federal ones.
4. Can You Consolidate Yours And Your Spouse´s Loans?
Nope. And that would be very unwise also. Think, if you will divorce and all your student debts will be under your name. You should pay them during the next 30 years on behalf of your spouse.
5. Can You Consolidate Yours And Your Parents Loans?
Very simply, you can not.
6. How The Loan Management Can Be Easier?
Think, that you would have 10 student loans, all from the different lenders, both the private and the federal ones. All the loans would have different repayment times and terms. For some this situation would not do any harm, but most borrowers would like to have only one or two loans. This is one of the major benefits of the consolidation.
7. What Is The Longest Running Time Available.
The long running time means lower monthly repayments. But a wise borrower will think also the other side of the coin. The more repaymnt installments he does, the more interests he will pay, i.e. the more expensive the whole program becomes. The longest repayment time is 30 years.
8. How Can You Pick The Best Lender?
As mentioned earlier, the graduate has a negotiation power. He can ask offers from several lenders and this, called the loan shopping, is the key to the best deal. It is wise to follow the student loans consolidation market for a longer time to research, what kind of offers the lenders use and to hit, when the real good one appears.
9. Do The Sudent Loans Consolidation Rates Fluctuate?
They do, because these products belong to the financial products which follow the economic situation, i.e. when the economy is growing, the prices go up and vice versa. This makes the timing ideal, if the graduate has an opportunity to wait. Of course the graduation and the Grace Period will dictate a lot.
10. Is The Student Loan Relief Possible?
The problem is, that the student loans represent a huge amount of dept nationally in US. The tuitions have increased and also other studying costs and this has led many students and graduates into big financial problems. President Obamas administration tries to find a way out from this problem.
When a graduate thinks the student loans consolidation he easily thinks only the lowest monthly payment program. This is natural, because these people are not familiar with the life planning nor the financial planning. However, it would be wise to think the pros and cons carefully.
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