Best School Loan Consolidation Options

The school loan consolidation offers the opportunity to combine all your loans and pay once and for all. There are a number of options that meet the needs of almost all. These options fall into two main categories:

The consolidation of federal loan
The private loan consolidation
1. Federal:
This type of consolidation loan school offers financial assistance to those who are enrolled in schools participating in federal aid programs. At school, we refer to a two-year or four-year degree awarding school, university or a public or private office.

Consolidation can help reduce your student loan debt by fixing and reducing the interest rates on their loans. This loan option also combine their separate loans debts into one package thus achieving debt paying options.

Eligibility for a federal loan:
To qualify for federal consolidation, consider the following before applying for it.

The applicant must be enrolled in school (defined as registered less than half the time)
You must be in the "grace period" of the loan or repay your loan must be actively.
Most consolidation companies require a minimum loan amount ie $ 10,000 is typical.
Federal loan rate:

Federal Family Education Loan Program: These are public and private loans to provide and manage educational secured loans to parents and students. It provides the types of loans for post-secondary education include:
Stafford Loans Stafford loan consolidation is still combining all your existing federal loans into a new refinancing rate of the loan program.
PLUS loan: PLUS loan consolidation loan is another form of federal school that allows you to pack all your PLUS loans previously taken to finance the education of their children, into one loan with a lower monthly payment.
A graduate Stafford loan consolidation: Graduate Stafford loan consolidation is a great financial tool for those who have recently graduated and are trying to pay their Stafford loans graduates.
Federal direct consolidation loans: the federal direct loan consolidation is a convenient payment tool that lets you combine all direct federal student loans into one loan. Federal Direct Loan offers the following options for consolidation:
· Consolidation loans subsidized: Thiscombines federal loans to eligible students for interest rate subsidies and subsidized FFELP, direct loans and federal Perkins loans.
Without direct grant consolidation loans: Thiscombines federal student loans that are not eligible for an interest subsidy. If any of the loans to be consolidated is unsubsidized, then you are eligible for the direct grant consolidation loan.

· Direct PLUS Loans Consolidation: Thiscombines FFELP and Direct PLUS PLUS loans.

Benefits of Federal Loan:

There are many benefits can be availed if you opt for the federal program. Some of them are listed below:

Reduce monthly payments
It provides fixed interest rate
It requires a single payment each month
Improved credit rating
It offers flexible payment options
No prepayment penalties
Disadvantages of the federal consolidation loan:

Compared with the benefits, consolidation has minor disadvantages, which are mentioned below:

Take time to pay
Increases the total amount of loans
Interest rates, or blocked if interest rates fall, your rate will not decrease / change
Lose benefits (if any) of previous loans
2. Private loan:

The purpose of the private loan consolidation is more or less the same as the federal loan consolidation, but the procedure and the characteristics differ. It only combines your private educational loans outstanding in one package. Private loans cover educational expenses such as tuition, accommodation or other educational expenses.

Eligibility for the private loan consolidation:

As there are some eligibility rules to qualify for federal loan consolidation, private loan similar to impose certain regulations on every application to receive approval for. Here is the list of the following criteria:

The candidate must be at least half-time enrolled in a degree program and / or technical diploma
Have a minimum of $ 10,000 in private student loans
He is able to pay the loans of private education at the time of application
Good Credit
Have proof of accommodation and reports income
Private loan benefits:

Improved payment history and credit score
Da competitive interest rates compared to non-government loans
It provides a way to consolidate the educational loans virtually all private and nonfederal
It lets you consolidate debt related to education, as well as credit card debt related to education
Allows you to write fewer checks and monthly payments can also Down
A longer repayment period (up to 30 years in some cases)
Lower monthly payment
Federal loan against the private - Difference:

Federal loan consolidation is a tool to refinance federal student loans only while the private loan consolidation is a way to refinance loans that private education. The main difference is that the consolidation of federal loan comes with a fixed interest rate, while the private loan consolidation is a market rate that can be fixed or variable.

If the consolidation of federal and private loans, you must make sure to keep them separate, ie refinancing a federal loan with a private loan will most likely result in a much higher interest expense compared to the amount paid to keep separated.

Our advice: A thorough investigation of all consolidation options first and only choose to consolidate their student loans.