Why Student Loan Consolidation is a Preferable Option for Students

Higher education cost is rising incessantly, so the students as well as the parents rely on the student loan to manage the expenses. After the recent economic meltdown, most of the people suffered job loss or wage deduction. Most of the young people failed to secure a job as the job market has not recovered from the distressful situation. In this situation, most of people defaulted on payment and complicated their financial situation. If you’re in a similar situation, then student loan consolidation can be a better option to eliminate your financial woes. You can actually manage your multiple student loan bills if you consolidate debt. In case you aren’t confident about student loan consolidation, you can continue reading the article to get more information on it.

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Is consolidation a good option for you?

Debt consolidation is a process where you can manage to combine your federal student loans into a single loan with one monthly payment. This can be an excellent option under the following scenario.

1. Unable to afford the monthly payments on your federal student loans under any of the options in Student Loan Repayment Options. You may also fail to qualify for a postponement or for loan cancellation.

2. You’re eligible for some of the payment plans described in Student Loan.

3. You’ve overwhelming debt and you fail to afford your monthly payments in spite of the repayment option.

3. You’re able to afford your monthly payments under a standard plan, but you’re keen to refinance at a lower interest rate.

4. You’ve defaulted on more than two payments on your student loan and keen to eliminate your financial woes.

Can you qualify for student loan consolidation?

Most of the federal student loans can be consolidated inclusive of the subsidized and unsubsidized Stafford loans, Direct Loans, Supplementary Loans for students along with Perkins loans.

Therefore, borrowers with these loans can effortlessly consolidate their debts after they complete their graduation or drop below half-time enrollment. Generally, the consolidation loans do not have grace period while you are in school or for the six months afterwards. However, these types of loans may not be a good option when you’re in school or just graduated and don’t have a job.

Are you aware of its limitations?

Before you apply for the loan, make sure you’re aware of the limitation to loan consolidation. Remember, you may not be able to include private student loans in a federal consolidation loan. The spouses are not allowed to consolidate their loans into a single consolidation loan. The borrowers are required to meet certain criteria before consolidating their debts.

What are the benefits and drawbacks of debt consolidation?

Benefits of consolidation:

One of the most important advantages of debt consolidation is that if you default on your government loans, consolidation may help you get out of default. It can also help you make your monthly payment affordable. If the interest rates are low, you can manage to lock in a low rate on your student loans.

Drawbacks of consolidation:

There are certain drawbacks of consolidation that people needs to know, especially who’re considering consolidation. If your loans are old, then consolidation can increase the interest rate on it. In most of the cases, consolidation may stretch your repayment period. Therefore, you may end up paying more interest over the life of the loan. Remember, you may not be able repair your credit report through consolidation. If you’ve defaulted on your previous loans, then it can be reported as “previous loans were in default but now paid in full through the new loan.”

How direct consolidation loan program work?

The repayment options on the direct consolidation loan program are extremely flexible. Some of the plans in this program are a standard plan, a graduated plan, an extended plan and an Income Contingent Repayment Plan (ICRP) or an Income Based Repayment Plan (IBR).

If you’ve defaulted on payment, then a Direct Consolidation Loan is an excellent way to get out of default and obtain a repayment plan that is affordable.

Therefore, debt consolidation is an excellent option to pay off your student loan. However, you need to evaluate your situation to know whether it’s a good option for you. Once you pay off your loans, you can regain control over your financial situation.

Private Student Loans

Private student loans generally are student loans provided through private lenders rather than lenders who work together with the government. A number of banks as well as other financial institutions provide these loans to their clients.

Usually the loans are given with terms that are less favorable when compared to government loans. They are usually useful for those students who require emergency funding, are not able to obtain sufficient aid or have unanticipated expenses that are not eligible for financial aid supported by the government.

The function of the loan is to meet the needs of those students who are not able get sufficient aid (in scholarships and grants) to meet their schooling costs or those who may not be eligible for government loans. Often these loans are utilized to cover living costs when the student is still in school. Being eligible for these loans usually involves a similar structure as when one is applying for other types of personal loans. A credit rating that is good, on-time installment payments history as well as qualifying debt-to-income ratio do apply even though these may not be heavily weighted like other personal loans. Before one applies for any type of loan including loans geared towards students, it is important for them to examine their household budget.

To apply for the loan, find a lender offering private student loans as many lenders do provide these types of loans including credit unions, banks and various private investors. You need to contact some financial institutions then inquire on their loan requirements. Maintain a credit history that is satisfactory for a minimum period of 18 months. Government loans do not involve any credit check therefore a person who has a low score or not having any credit history can be eligible for financial aid. But private loans entail credit checks and borrowers require a credit score that is acceptable.

Get a co-signer. People who do not qualify for this type of loan because of bad credit may get endorsement with a co-signer and this may include a spouse, parent or any responsible adult. Generally, co-signers require good credit and equally they are accountable for the debt. Compare private loan terms and rates. Since these loans vary, it is good to compare rates. You can request quotes from about 3-4 private lenders and review the quotes paying attention closely to the terms of agreement and interest rate. Then select the student loan offering the lowest rate. Apply for sufficient money to cover your education needs. Since these loans do not feature annual limits, then borrowers can get cash to cover the whole cost of board and tuition. Before applying for the loan, total the education cost.

Private loans can require the student to make minimum payments via school or they can offer payments that are interest-only when the student is still in school. A few private lenders may follow a similar procedure like the government in permitting no payments during deferment, school or forbearance. The duration for repaying private student loans may vary from 1-10 years and interest rates may be a bit higher than those of federal student loans.

Scholarships for College

There are hundreds of scholarships for college that students can apply for. Whether they are academic based, sports scholarships, writing contests, or certain needs based scholarships, there are many ways to go about attaining funding to pay for your schooling. So, regardless of what you choose to apply for, and which possible scholarships for college you might be eligible for, if you do need money to pay for school, and do not want to have to worry about paying back thousands of dollars in loans, there is free money out there that you can apply for to help pay for your schooling.

How to apply for Scholarships for College –
Depending on the scholarship, and who is offering the money, there are many places you can apply. When applying for scholarships for college, you cangenerally apply online with the site of the company or institution that is offering the scholarship. If you are being considered as one of the few applicants to be chosen for a particular scholarship, and if you are sought out by a company, you can file a paper application directly. Depending on the requirements, there are going to be different ways to apply. Most of the time all students have to do is to fill out the application (whether it is paper or electronic), and submit the required documentation. So, if it is an essay or competition type of scholarship, all that would be submitted would be the application, an essay, and other information that the sponsor asks for. The application methods will vary based on who is offering the scholarships for college, and what they require when you submit your application.

Where to apply for Scholarships for College –
Again, depending on the type of scholarship being offered, and the company or entity offering it, the means of applying will vary. Some of the most common methods for applying for scholarships for college include:
– filling out a paper application, and sending it in with all required documents to the address of the scholarship host;
– filling out online applications if the company sponsoring the scholarship accepts the application online; or,
– turning the packages in personally, in the event you are being considered for a sports based scholarship, or an academic scholarship, that was presented to you specifically by your high school, or by the company that is offering the scholarship.
The method of filing and turning in the application is going to vary for each application, so applicants have to read all directions, in order to know what to submit, when to submit it, and how it should be submitted. Making sure all required documentation is turned in is essential to being considered for the scholarship, especially if it is one where there are thousands of applicants who are vying for the same funds, and are competing for the same scholarship that is only being offered to a few individuals who meet the set forth criteria in the application package.

Where to obtain Scholarships for College –
Nearly every big company (Burger King Essay contest – example), offers some kind of scholarship. Additionally, there are various government, scholastic (academic), and sports based scholarships. There are different scholarships for minorities, and other groups. As a student, visiting FAFSA (government site), is probably the best way to learn about scholarships for college. You can also go on any major search engine to find out what is out there. If you have a skill, or if you are part of some minority group, there is money out there, and all you have to do is apply for it, in order to be considered for it.

What can you use the money on –
There are different scholarships for college, and depending on what you are getting the scholarship for, there may or may not be limits on the uses. Some of the limits that are put in place include:
– government based scholarships will generally mean students can only use them on school expenses (dorm, books, tuition, food, etc);
– if offered for a specific reason (for example, $1000 for books), then the student will be limited in using the money for the set forth purpose;
– if it is an academic or sports based scholarship, then students are generally going to be required to use the money for school needs; and,
– if the scholarships for college are offered by private entities (example – a writing competition or essay competition offered by a large company), then in that case students will generally be free to spend the money in the way they see fit.
So, knowing who is offering the scholarship, and whether or not there are any limits in place, are some of the things to consider when applying for the available scholarships for college, which will give you the different uses, and the restrictions that are imposed, on the money you are going to be receiving from that scholarship amount.

What to consider when applying for a Scholarship –
When applying for the many scholarships that are available, students have to consider a few things. Some factors to keep in mind are:
– competition (if it is a desirable scholarship, you have to be competitive, and you have to apply early);
– submit all materials required, and submit things early;
– make sure you abide by all rules and requirements;
– take the time to read and fully understand the guidelines, requirements, and criteria; and,
– make sure you sell yourself, and allow yourself to stand out.
Especially for the most desirable scholarships, you are going to have to shine if you want to get the money. For this reason, students have to put their best foot forward, and make sure their application package is submitted early, has all the required information, and truly makes the student stand out against all of the individuals who are going to apply.

There are thousands of scholarships available, some are very easy to get, others require some work. Regardless of which one (or a few) of thescholarships for college you choose to apply for, making sure you stand out against the competition is essential to being considered, and actually getting the money that is out there.

How Can Financial Aid For College be Found?

A lot of people have been asking me this exact question quite often. It presents itself to them as they seek financial assistance and aid for their fees for college. Well, to be frank, a lot of these people have something in common or should I say a common misconception, that being they think that they have to wait until they are close to graduating high school before they can get financial aid for college. The truth of the matter is something entirely different! You may be surprised about how soon these types of scholarships or grants can become available to you and when.

This is especially true for women who are looking to move up the ladder in their career, earning a college degree can improve you and your family’s lifestyle in ways you never imagined. So if you happen to be a mom who is curious about the best way to get financial aidand assistance for funding college, then it is vital that you’re well aware of the many different grants and scholarships that are available to you. These scholarships and grants can help you finish your schooling by giving you the money you need to meet your schools cost.

There are too many different grants to name here which can help you finish your schooling. I’ll just mention the two most popular which are the Pell Grant and the FAFSA. Alongside these you can try to get women’s opportunity awards, a highly specialized program that’s more commonly referred to as the Project working mom.

I’ve named just a few of the different programs available that can help you meet your educational needs. Apply to these different programs and use the Internet to find even more to help you earn your degree.

How to Get Financial Aid for College.

Getting financial aid for college can be the difference between getting your education and quitting before you earn your degree. There are many types of financial aid available that can assist you through college, including grants, loans, and scholarships.

Grants and Scholarships

Grants and scholarships are two types of financial aid for college that never have the requirement of being repaid. Grants normally are readily available to you through the federal government as well as independent organizations and third parties, while scholarships generally come from the college that you are attending or third party organizations. To be eligible for most grants and scholarships, you need to be accepted into a college or enrolled in classes to receive the money.

Federal grants are available, but you do need to apply directly to the grant organization to receive the money. Most students use the FAFSA, a form that supplies your information to different colleges, to enable the applicant to apply for federal financial aid for college. This application allows you to apply for federal grants, loans, and work-study programs at once, eliminating the need for several applications. To receive your package of financial aid, your school may require some independent verification.

Loans

Federal and personal loans are also a major part of financial aid for college. Loans from the federal government can amount to well over $40,000 per student, and allow students to take up to 12 semesters or 180 credit hours. For students with little time to devote to studies, these timeframes can allow for longer periods of time to complete your education while still being eligible for financial aid for college.

Both traditional and non-traditional students can receive all three types offinancial aid for college if they meet the eligibility requirements. Nearly all colleges provide some form of financial aid in addition to this, which gives a lot more students access to the tools they need to get their degree.