Federal government student loan consolidations are available to students and parents who have borrowed money to finance education and want to pay off the debts in a manner that is easier and cheaper. While there are many advantages to consolidating loans, there are also some factors to consider before finalizing a plan for federal government student loan consolidation program. Rates may be similar. However, there may be some incentives worth looking into in order to lower the interest rate for one's college debts.
It is important to know who qualifies for this consolidating. Either a parent or a student may apply for federal government student loan consolidation. However, the student must be enrolled less than half time in order to qualify. In addition, the college attendee needs to be in a repayment period with their loan, or in a grace period, which is typically the six months after leaving school. Furthermore, to qualify, the borrower must not have previously consolidated their loans. However, if the borrower has lending that has not yet been consolidated with their other loans, they still may be eligible for federal government student loan consolidations.
While there are several advantages to participating in these programs, there are some additional things to consider before consolidating. The advantages include getting a lower, fixed interest rate, a lower monthly payment and flexible repayment options. These benefits to federal government student loan consolidations are in addition to the other benefits one probably already has: no fees, charges or repayment penalties and no credit checks or co-signers. On the other hand, the longer repayment term may increase the total amount of finance charges paid over the term. Furthermore, borrowers will not be able to consolidate again, even if the interest rates drop.
Some lenders offer additional incentives to bring the interest rate down. If borrowers allow electronic payments to be taken automatically from a bank account, they can qualify for a decrease in the interest rate. If they make 36 consecutive on-time payments, borrowers may be eligible for additional reductions of interest rates for federal government student loan consolidations. Finally, if the borrower consolidates during the grace period, they also can lower interest rates.
Deciding whether to participate in such a program is a decision that should take some serious consideration. Not only should one plan on doing research and comparison of federal government student loan consolidation companies, but one should also seek advice from others who can help weigh the decision. Most importantly, borrowers need to pray and consult the Lord who, when we acknowledge him in decisions, "shall direct our paths" (Proverbs 3:6)
No comments:
Post a Comment