| To
deal with this early financial crisis, many companies
and banks offer student loan debt consolidation. This
process involves taking another loan to pay off the
previous one. However, the new loan has lower rates
of interest and longer repayment duration. If the student
has taken more than one loan, these can all be combined
together and paid off with the new loan.
The federal government supports most
student loan consolidation programs. Consolidation with
a Federal Consolidation Loan has several advantages,
including a low, locked rate for the entire duration
of the loan. The different student loan consolidation
services offer varying interest rates. Some of these
rates are discussed below.
4.5% Fixed Student Loan Consolidation:
An offer with consolidation rate locked, with interest
rates as low as 4.5%, with other parameters such as
no credit check, no pre-payment penalties, this is a
free U.S. government program - no fees or other charges,
etc.
5.0% Student Loan Consolidation: An
offer with rate as 5.0% and other parameters such as
discount, no credit checks, no fees and other charges,
etc.
1.75% Benefit Student Loan Consolidation:
An offer with 1.75% total discount on fed rate after
24 months for federal student loan consolidation. Fixed
interest rates as low as 4.875% and other parameters
such as reduction in monthly payments up to 60%, 1.25%
interest rate reduction after 24 on-time payments, 0.5%
interest rate reduction for auto-debit discount, etc.
Thus, students have numerous options
to choose from when selecting a loan consolidation service,
depending on the amount to be repaid and the monthly
income.
When choosing a student loan consolidation
program, the most important factor to be considered
is the interest rate. Various agencies offer special
low student loan interest rates on Federal student consolidation
loans. A consolidation with a low rate and a low monthly
payment can save thousands in interest fees over the
life of the loan. One needs to obtain multiple student
loan consolidation quotes and compare rates, besides
considering other parameters such as credit check, consolidation
fees, early repayment options, and penalties.
Consolidation loan interest rates are
based on a weighted average of the rates on the existing
loans. The lower the original interest rates, the lower
will be the consolidation interest rate. The interest
rate on Federal Consolidation Loan is calculated on
the weighted average of the current interest rates based
on the loan disbursement date.
Federal Student Loan Consolidation
Interest Rate: The Federal government sets interest
rates for consolidation. The fixed interest rate equals
the weighted average of the interest rates of the loans
being consolidated. The maximum rate should not exceed
8.25%. You can use a Weighted Rate Interest Calculator,
which is easily available online, to determine your
consolidation interest rate.
Various student loan consolidation
services available offer attractive schemes to those
looking to consolidate their educational loans. To get
the best deal, students are advised to obtain multiple
student loan consolidation quotes and compare the rates
and other factors.
For more articles
on Debt Consolidation please go to: http://www.debtconsolidationcenter.net/
Gibran Selman takes
care of http://www.debtconsolidationcenter.net/
a website dedicated to gather information, on and off
the internet, about debt consolidation and other related
subjects.
Article Source: http://EzineArticles |
