There’s a lot of of college loans procurable for College Students who’s searching financial aid to go to a University. A popular college loan consolidation avenue countless students take is through the U.S. Government Federal Loan Program. A Free Application for Federal Student Aid (FAFSA) form must be filled out before a Student can be considered for a particular government student loan. There are also four types of government loans namely, Graduate PLUS Loan, Parent PLUS Loan, Perkins Loan and the Stafford Loan. With inumerable web sites and supposedly experts in the media, it is important that a Student get the best student loan consolidation advice they can procure.
Consolidation of student loans can be critical for Students to get their financial situations under control. Student loan consolidation simply means the act of obtaining one loan to pay off all the others, thus creating one loan where a Student or the Parents may have had 2 or more loans to pay off. Government student loan consolidation can make a borrower choose from the four repayment procedures like the extended payment plan. Consolidation of student loans generally results in a lower monthly payment with no penalties included for the early paying off of the loan.
One advantage of consolidating all your student loans is that your monthly payments will likely be lower. Additionally, these types of Federal loans generally do not require a credit check. And also, if a government student loan is consolidated its application process will be a lot simpler. Parents or Students with Private student loans need to weigh the pro’s and con’s of private student loan consolidation before taking action.
The lower monthly payment you may receive when consolidating will help ease the burden of paying this loan back. This helps many students get on their feet and obtain a good paying job so that repaying their student loan doesn’t put them in in a financial crisis.
One needs to know the pitfalls associated with student loan consolidation before taking action. Student loan consolidation is not a good choice for everyone. There are pitfalls to consolidating a student loan, many of which no one is willing to educate the Student about.
If you do nothing to better your financial status after consolidating your loan, then I’d advise against consolidation. Consolidation can give you a chance to get on your feet, but it will do nothing to help you if you do nothing.
Consolidating your government student loan during the six month grace period will result to the loss of the rest of the grace period. Furthermore, a consolidated loan means an extended payment plan which can cause a the total amount to be paid back to be raised as time goes by. As a matter of fact, the total amount paid back may reach thousands of dollars in cost. Thus, sometimes, consolidation may not be convenient and cost-effective.
Federal student loans are truly a gift for students who are in need of financial aid. However, consolidating it may or may not have a positive effect on your long term financial situation. Smart students and parents will do their due diligence when researching on whether or not to consolidate college loans.
By andrew_t8 from Pixabay