A student loan consolidation makes repayment seem more manageable because you only have one loan and one payment. You also have other ways for consolidating student loans such as a direct consolidation loan that offers many repayment options depending on your finances.
You can consolidate your student loan directly with the US Department of Education through a direct consolidation loan. They offer a number of payment options for you to choose.
If you need the flexibility to change your payment plan due to changes in your financial situation, the direct consolidation loan is what you need. It is designed for just his purpose.
Another repayment plan is called the standard repayment plan. With this plan you will settle on a fixed monthly amount until you have paid the balance in full. Your monthly payments can start out as low as $50.00 per month for 30 years depending on the amount you owe.
The extended repayment plan goes up to 25 years but to be eligible you have to have a loan amount that is more than $30,000. You can have a fixed monthly payment of $50 until you have paid off the whole loan or pay the interest first and settle the remaining amount later. For the latter option, your payment will start out very low and will increase every two years.
The income contingent repayment option determines your monthly payment based on your annual income, balance owed and the size of your family. The loan term may be extended for up to 25 years.
The direct consolidation loan does not have specific requirements for you to qualify, and there is no fee. You only have one lender to deal with which is the U.S. Education Department.
You now have all the information you need to know about the direct consolidation loan payment options. This should help you make a more informed decision about the program and let you compare with other consolidation loan programs that are available.
By: Ryan Wilkins
Posts Tagged ‘Financial Situation’
Student Loan Consolidation Info – When Is It Time For A Loan Consolidation?
January 7th, 2010
Many factors can tell you when the time is right for a student consolidation loan. Knowing when to get one can help you by lowering your payments and making your many student loan payments turn into just one easy to manage payment each month.
Obviously, if you are having trouble making all of the minimum payments on your various student loans each month, you should get a student loan consolidation to help you out immediately by making one smaller payment each month to take care of all of your debt.
Another great time to consider a student consolidation loan is if you have to leave school due to a family obligation, a financial situation, or a career requirement. Most likely you will want to return to school at some point in your life, so a student loan consolidation can help you to make your payments on time and ensure you will be able to obtain the financing you will need to further your education when the time comes.
Also with a ten year loan consolidation plan, you can fix the current loan rates for the term of the student consolidation loan and by doing save lots of money. Another benefit of any student consolidation loan is that you only have one payment to manage, by reducing the number of student loans you need to manage you will also reduce the number of lenders you have to deal with over the years.
You Cannot Hide From Your Student Loan Debt.
No matter how long you go without paying back your student loans, they will catch up with you sooner or later. You can not eliminate your student loan debt any other way than by paying them off completely, either with your own funds or by getting a student loan consolidation. Student loans are never included in any form of bankruptcy, it is set up through the government so that they are immune from bankruptcy completely.
If you don’t pay back your student loans when the time comes, you will face severe punishment. Your credit score will be negatively affected and your wages can be garnished along with penalties from the IRS.
Also worth noting is the possibility that you won’t be able to attain the licenses required in certain fields if you don’t pay back your student loans. Other ways the government punishes you for not repaying your student loans is by excluding your small business from getting government contracts to benefit your business. Consolidating can allow you to pay back your student loans so that you may return to school and obtain financing to further your education and then you can always consolidate it again after you have graduated.
By: Ian Wilkie
School Loan Consolidation For Students
December 12th, 2009
The cost of school education is sky rocketing in today’s society. The only option that students have is to go in for school loans. They need loans not only for school fees and exam fees but also for books, clothes, food, boarding and so on. So they keep accumulating these loans and they become a huge colossal amount.
Once they complete their education, all these loans fall due. However, they do not find good jobs immediately and they find it difficult to repay these loans. The best way they can solve this problem is to go in for school loan consolidation. By this, all their loans with the various lenders are combined into one loan. Next, the interest rate, terms and duration of the loan is fixed based on the financial situation of the borrower.
These loans normally have a term of around 20 to 30 years. This ensures that the amount of monthly repayment they have to pay reduces a lot. Sometimes, this is only 50 percent or lesser than what was previously paid.
The main advantages of School Loan Consolidation are
• No risk of defaulting on loan payments
• Reduces hassles as you have to make only one payment to one lender. Previously you had the burden of making multiple payments to various tenders.
• Improves your credit score as all your previous loans are considered paid and you have only one loan to your name.
The only disadvantage of consolidation is that your interest amount is slightly more when compared in absolute terms. Since there are various scams doing its rounds, always be alert and aware before you go in for this form of financing.
By: Steven Copper