What are federal consolidation loans? A proud college senior only lacks a few months until graduation day when her studies will be over. She will walk away with her diploma in her hand, ready to step into her new career. Suddenly, the realization hits her. She had never really thought about it before. There are a number of student loans that she has to start paying off right after graduation, and her beginning salary isn’t enough for living expenses plus all of those loan payments. What will she do?
The simplest way to solve her problem is to consolidate all of her federal loans into one federal consolidation loan. This kind of loan is a way to refinance all of your existing federal loans into one fixed-rate loan.
A consolidation loan is an excellent way to manage your finances, it provides immediate relief from high payments and it provides long range benefits. One of the immediate benefits is that there are no application fees, hidden charges or credit checks.
By consolidating her federal loans she can save up to 53% on her monthly payments, making them considerably cheaper and easier to take care of. For example, according to StudentLoanConsolidator.com, if she has $50, 000 in different federal loans, her monthly payment right now would be $570. 80. After consolidation, she would pay just $343. 88 a month. That is a monthly savings of $226. 92!
Applying for federal consolidation loans is really quite simple. You need to have your 4 digit FAFSA pin number, the loan details for each federal loan and know which loans you want to consolidate. You will need to do some research about the different types of repayment plans you can choose from, so you will be ready to select the plan that best suits your individual needs.
When you consolidate all of your federal student loans into one loan you can extend your repayment plan from ten years up to thirty years. This will lower your monthly payments considerably, allowing you to have the money for housing expenses, car payments and any career related expenses you might have. In a consolidation loan there are no penalties for paying it off earlier. If you have extra money one month, you can pay an extra amount and reduce the length of your loan.
Federal consolidation loans are the answer to the financial woes of many graduating college seniors who are just entering their new career. When you make the decision to consolidate your financial loans, you will be able to leave your financial woes behind, and begin to enjoy financial freedom.
By: Charles Gloson