Loan Consolidation 101 Tips For New Graduates

Loan Consolidation 101 Tips For New Graduates



Loan Consolidation 101: Tips For New Graduates
With college graduation ceremonies taking place this spring,​ how can students get off to​ a​ good start when it​ comes to​ managing their student loan repayments?
Loan consolidation is​ one option .​
a​ Federal Consolidation Loan combines all eligible loans into a​ single,​ new,​ federally guaranteed loan that has a​ longer repayment term,​ a​ fixed interest rate that cannot exceed 8.25 percent and the​ convenience of​ one monthly payment .​
Most important,​ borrowers who apply for a​ Federal Consolidation Loan before July 1 can potentially lock in​ an​ interest rate as​ low as​ 4.75 percent for the​ duration of​ their repayment period,​ which can extend as​ long as​ 30 years .​
Before consolidating,​ however,​ borrowers should carefully consider their decision,​ says Patricia Scherschel,​ vice president of​ loan consolidation for Sallie Mae,​ the​ nation's leading provider of​ education funding and the​ largest consolidator of​ student loans .​
While consolidation is​ beneficial for most education loan borrowers,​ it​ is​ important that they make an​ educated choice,​ she says .​
This is​ the​ start of​ a​ long-term financial relationship with your consolidation loan provider,​ says Scherschel .​
Make sure you​ take time to​ ask questions and get a​ full understanding of​ your interest rate and possible discounts before signing on​ the​ dotted line.
Scherschel offers the​ following tips for borrowers who may be exploring loan consolidation .​
• Contact your college financial aid office for recommendations and information on​ reliable and trustworthy lenders .​
Because consolidation lets borrowers extend their repayment up to​ 30 years,​ it​ is​ important to​ choose a​ lender with a​ solid reputation,​ industry experience,​ flexible repayment options and superior customer service.
• Investigate a​ lender's borrower benefit program .​
Many lenders,​ including Sallie Mae,​ will offer interest rate reductions for paying on​ time or​ using direct debit .​
Be sure to​ read the​ fine print of​ the​ benefit program being offered,​ including if,​ when and how you​ qualify for the​ benefit,​ as​ well as​ how you​ could potentially lose it.
• Be cautious of​ the​ word free .​
While lenders are not permitted to​ charge borrowers a​ fee to​ consolidate their loans,​ Consolidation Loans are not interest-free .​
It is​ important to​ understand all of​ the​ costs up front.
• Keep on​ top of​ deadlines .​
On July 1,​ interest rates on​ federally guaranteed education loans are expected to​ rise .​
Borrowers who consolidate at​ today's interest rates could save hundreds,​ even thousands,​ of​ dollars .​
Consolidation is​ the​ key to​ protecting yourself from an​ interest rate increase,​ Scherschel says .​
After the​ final exams are over,​ current students and this spring's graduates should have a​ one-track mind: getting their consolidation application in​ before midnight on​ June 30.




You Might Also Like:




No comments:

Powered by Blogger.