Student Loan Consolidation Center

There are a number of loans that qualify for consolidation, which is a great way to save money while lowering the monthly repayment.  For instance, if you have any of the following loans, they would be eligible:

• Federal PLUS – For parents who want to send their kid to college, the Federal PLUS is a special loan type
• Federal Stafford – Often, students will take out Federal Stafford loans, which is the primary source of financial assistance going out to people in college.  In this case, both subsidized and unsubsidized loans would be considered for consolidation.
• Perkins – The benefit to Perkins loans is that the interest rate is so low.  Therefore, students who need financial aid and attend approved schools will often carry a Perkins loan
• Supplementary – This includes unsubsidized student loans

Generally, eligibility to consolidate my loans would depend on a number of factors in addition to the loan type.  For instance, if the loan is in deferment, grace, or repayment status, it is likely that a consolidation loan would be possible.  If interested in eligibility to consolidate my loans, I would need to know the type of loan I have.  Amazingly, many students have no real idea of the loan type.  This can be confirmed by visiting the National Student Loan Data Systems or NSLDS website.  Using a PIN provided by the United States Department of Education or asking for one online gives a student access to this information.

Remember that almost every student who has a guaranteed Federal PLUS, GRAD PLUS, or Federal Stafford loan would qualify for a loan consolidation.  Even with this, I know that I would have to meet specific guidelines in order to qualify.  Therefore, eligibility to consolidate my loans would mean meeting the following:

• If my parents were the ones borrowing the money, they are entitled to go through the consolidation process any time no matter what my enrollment status is
• For me as the student needing to borrow money, I would have to be out of school or I could choose to cut down my enrollment by 50%
• I would also have to show that I have no other application pending with another lender
• I would also have to be within a six-month grace period, in actual repayment, or in a post-school grace period in order to qualify

Any student interested in securing a student consolidation loan would start by talking to a lender, the one where the original loans were secured.  From there, an application would have to be completed.  Keep in mind that most lenders in this situation are very willing to help.  Obviously, they want to protect themselves as well as help students so they will create a new consolidation loan, which becomes a win-win situation for them and the student.

One of the greatest things about consolidating student loans is the lower interest rate.  Lenders will look at the interest currently being paid on outstanding student loans and find the average.  From there, they will establish the new interest rate based on this information.  Typically, most student consolidation loans now offer interest rates anywhere from 8.25 to 9% although there are some that can go as low as 7%.  The savings is generally substantial.

Another factor associated with eligibility to consolidate my loans is that the repayment period changes.  Once the loan has been granted, I would have 60 days in which I need to make the first payment.  However, to help lower the amount of my monthly payment, lenders will also extend the repayment time.  In fact, there are some lenders that will stretch repayment options out to as much as 30 years.  Of course, the actual schedule associated with the new consolidated loan will depend on the combined balance of existing student loans, as well as any other outstanding debt specifically associated with my education.

While student consolidation loans may not be for everyone, they are certainly an excellent way to get on top of finances.  After all, the money needed to complete an education can be extremely high depending on the type of financing but also, the degree being earned.  After graduation, it takes time to get on track as far as a good paying job.  Take people earning a degree in the healthcare industry, especially doctors.  While they might reach a high income level at some point, it will take years to build a solid business.  Therefore, having the option to pay a student loan over an extended period while income grows is very beneficial.

The bottom line, eligibility to consolidate my loans depends on a number of factors.  In most cases, the eligibility is straightforward but there can always be extending circumstances that come into play.  Therefore, anyone interested in securing a consolidation loan will get the best information and answers by going directly to the lender that gave them the student loans initially.