student loans consolidation

Juggling monthly payment bills can be a real hassle. These include rent, water, electricity and other basic services that need financial attention. It can be more excruciating if your student loan bills come in separate envelopes and have varied confusing computations and interest rates. There are solutions to this monthly turmoil. You can start managing your finances with your student loans. Consolidate them and be better organized.

Student loan consolidation is a repayment scheme that rolls in together all your loans into one payment, adjusting your interest rates into a fixed one. This tool can lessen the amount of your monthly fees up to 53% and give you a longer period to settle the loans you've made.

This scheme is also helpful if it is done with your private loans that have higher interest rates as compared to that of a federal student loan. Moreover, they have shorter payment periods and have insufficient protection policies as compared to federal loans. It is advised that if it goes beyond your monthly salary by 8%, or if your private debt has reached or exceeded $5,000, consolidate them. However, it is not wise to put your federal and private loans together in one consolidated payment scheme. You will lose the benefits of the federal loan payment policies.

Almost all federal and private loans are qualified for consolidation. However, in everything, these are good and bad sides. The advantage is that you don't have to think about multiple monthly loan bills coming your way. Only one student loan bill will barge into your house every month. Another is that the payment will be consistent to the existing interest rates, favorably to the lower rates that you are paying for the other loans made. Finally, it gives you longer repayment periods, so you don't have to rush around looking for money to pay your debt.

On the other hand, consolidating private student loans will not entitle you to the benefits of the drop of interest rates since your scheme is already pegged down to a certain interest rate. The government also pays for your loans for six months after graduation.

Consolidating your student loans will remove this grace period. There is currently also a decrease in the federal funds. Private loans are affected by the global financial crisis that boomed this 2008. It could result into higher interest rates as compared to consolidations done before. Likewise, variable-rate loans are phasing out.

There are a lot of institutions that offer their services. Some names well-known for private student loan consolidations are Sallie Mae, Next Student and Citibank. The first thing to do is to go through a study or research on where you want your loans to be consolidated. The best place to start is with your original lender. Inquire with them about the rates you can begin with; and then, move on to the next lenders. Compare which one can give you the lowest interest rates, best benefits and payment conditions. An excellent way to begin is with low rates that increase over time. This is a more manageable scheme.

Remember that private consolidations are reliant on your credit score and that of your co-signor. You can apply for lower rates if your co-signor has good credit. Of course, it would be advisable to look at your other financial obligations before you decide to consolidate your private student loans.

For students who already have an outstanding federal student loan with the U.S. government but still unable to make ends meet, they might consider another alternative - the Private Student Loans.

Advocates of private loans claim that this student lending scheme combine the best elements of government student loans in one: the amount limit, in general, are relatively higher than federal loans, while there still is a grace period of mostly six months during which the student does not have to start paying back his loan right after graduation.

Such a grace period is not included in a federal parent's loan, which has a higher limit than a federal student loan. Critics of private student loans, on the other hand point out that its high interest rates, multiple fees, and lack of borrower protection is not very likable.

Compared to federal loans, which has lower and fixed interest rates, private student loans have variable interest rates. Consumers should keep in mind that the total sum of a loan involves additional fees. While these fees would increase the total cost of money borrowed, it would also reduce the money available for education purposes.