Sallie Mae Loan Consolidation Explained

Sallie Mae Loan Consolidation Explained



Sallie Mae Loan Consolidation Explained
This article hopes to​ give you​ the​ knowledge you​ need,​ to​ know that you​ have a​ firm grasp on​ the​ subject .​
When your student loans get the​ best of​ you​ and you’re wondering how you’re ever going to​ get out from under all that debt,​ take a​ look at​ loan consolidation .​
It may be the​ answer to​ a​ number of​ your problems .​
Turn to​ Sallie Mae loan consolidation for a​ way to​ pay off your federal student loans,​ improve your finances,​ and put a​ little extra money in​ your pocket every month .​
a​ Sallie Mae loan consolidation replaces your existing multiple student loans with one loan,​ usually with a​ dramatically lower interest rate –as low as​ 4.75% .​
The difference a​ few percentage points can make in​ monthly payment amounts can mean the​ difference between scraping to​ pay bills and actually having a​ little extra pocket money .​
It is​ not uncommon for a​ borrower to​ get a​ fixed interest rate that is​ up to​ 0.6% lower than their current rates .​
According to​ federal regulations,​ calculating the​ interest rate on​ a​ consolidated loan disbursed on​ or​ after July 1,​ 1994 involves the​ weighted average of​ the​ interest rates of​ the​ old school loans you​ are consolidating under the​ new one,​ rounded up to​ the​ nearest one-eight of​ one percent .​
Fixed interest rates on​ a​ consolidated loan cannot exceed 8.25 percent .​
Every July 1,​ the​ interest rates on​ federal student loans are subject to​ change according to​ the​ annual fluctuations of​ short-term federal securities,​ and with them your monthly payment .​
One of​ the​ benefits of​ a​ Sallie Mae loan consolidation is​ that the​ interest rate is​ locked in​ for the​ length of​ the​ loan .​
While interest rates may be lower some years,​ when you​ are locked into an​ interest rate at​ least your payments will be predicable and will not rise in​ the​ years when the​ interest rates do .​
A Sallie Mae loan consolidation also offers the​ opportunity to​ increase the​ length of​ the​ loan .​
The longer you​ have to​ pay it​ off,​ the​ smaller the​ monthly payments will be .​
Remember though,​ lengthening the​ life of​ your loan may mean paying out a​ larger total amount over time .​
Applying on-line for a​ Sallie Mae loan consolidation is​ free,​ there are no fees,​ and there are no credit checks .​
a​ few minutes of​ your time can get you​ smaller monthly payments and better credit scores; when your Sallie Mae loan pays off your old student loans,​ your credit report reflects those paid off debts.
Things happen in​ life and in​ a​ crisis sometimes,​ those student loan payments don’t get made on​ time,​ or​ at​ all .​
If you​ have used up your deferment and forbearance options on​ current loans,​ consolidating your debt under one Sallie Mae loan may mean a​ fresh start and a​ clean slate .​
If you​ are facing a​ situation where defaulting on​ one or​ more of​ your current loans is​ a​ very real possibility,​ acting now to​ take advantage of​ a​ Sallie Mae loan consolidation may save you​ a​ lot of​ problems and help you​ out of​ an​ overwhelming situation .​
If you​ decide that a​ Sallie Mae loan consolidation is​ what you​ want,​ there are four options for repayment plans,​ the​ Standard Repayment Plan,​ the​ Extended Repayment Plan,​ the​ Graduated Repayment Plan,​ and the​ Income Contingent Repayment Plan.

The Standard Repayment Plan offers fixed monthly payments,​ but the​ life of​ the​ loan is​ limited to​ 10 years .​
The Extended Repayment Plan also offers fixed monthly payments,​ but spreads them over 12 to​ 30 years,​ depending on​ the​ total amount borrowed,​ which lowers the​ amount of​ the​ monthly payments .​
The Graduated Repayment Plan also spreads payments over 12 to​ 30 years,​ but the​ monthly payments increase every two years .​
The Income Contingent sets a​ payment plan that is​ calculated on​ your annual gross income,​ family size,​ and total consolidated loan debt,​ figured into a​ period of​ 25 years to​ pay it​ off .​
a​ Sallie Mae loan consolidation may be the​ best option for you,​ but be sure to​ explore your options thoroughly to​ make sure you​ get the​ best loan for your situation .​
Now the​ next time someone asks you​ about this topic,​ you​ can give a​ little smile and provide them an​ informative answer.




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