What is The Difference Of Consolidating Private VS Federal Student Loans?

Contrary to popular belief, private loans can be consolidated. Here is what you should know if you have them and are considering consolidation.

1. Do not consolidate them with federal loans even if they provide the option.
2. They can’t consolidate until you’re out of school and beginning repayment.
3. In most cases, consolidating private loans will leave you with a variable rate loan and it will not typically fix your loan rate (like federal consolidation).
4. Keep in mind that the best option is often to leave them alone. How to know?

Remember that federal student loans are subject to unique terms and conditions and may not be combined with the Student Loan Consolidator Private Consolidation Loans. You need to take advantage of separate federal and private consolidation loans companies for this.

Look at the benefits of your current lender. There are only about ten lenders that will consolidate any private loans. Most companies require that you have loans with them to be eligible to consolidate with them.

The amount will vary, some will require that you have one or more loans with them some and will require 50 percent or more of the consolidating amount be to with that lender. Researching your lender is a good start.

You should shop around and as mentioned, there are few companies that don’t have stipulations in order to use their consolidations or refinance programs. Here’s a published list: http://finaid.org/loans/privateconsolidation.phtml. The lender, not the government, dictates the interest rates provided and most are linked to the Prime Rate.

Most Often Asked Questions Regarding Consolidation Of Private Student Loans

Is there a certain loan amount that must be considered for private consolidation of loans? Yes, the minimum loan amount is $7,500. And the maximum amount is $300,000.

How can I find out how much I owe and when my private student loans will be approved for consolidation? By reviewing your most recent monthly statement and checking your on-line access to your account balances. And once your required documentation has been received, a loan decision and if approved, will begin the process of paying off the loans you listed for consolidation. Once completed, you will be sent a letter of confirmation.

Regarding interest rates, what is the interest rate on my loan after the first year and can I make interest-only payments in my second year? On the first anniversary of your loan closing, the interest rate on your loan changes to Prime Rate or LIBOR plus 5.oo percent to 5.75 percent, depending on your credit history or if you have a co-signer.

During the second year, you are still eligible to make interest-only monthly payments. It is only on the second anniversary of the loan closing that you will be required to make principal and interest payments.

Which types of loans are eligible to be consolidated in the Private Student Loan Consolidation Program? Any existing nationally marketed private student loan is eligible for the Student Loan Consolidator Private Consolidation Loan. Federal student loans, home equality loans and credit card obligations are not eligible for consolidation.

If you are unsure whether a loan may be eligible please call the customer support center at 866-496-5787.

Saving For College As A Youth

Don’t take on “impossibly huge” saving goals. Instead, plan on saving one-third of the college cost beforehand, advises Robert Franck, chief college expert at the Princeton Review, the well-known college advisory service.

Author Mark Kantrowitz, creator of the widely acclaimed FinAid.org Web site, interprets the one third rule this way: “You should expect to save one-third of the anticipated college costs, pay one-third from current income and financial aid during the college years.

And then you should borrow one-third using a combination of parent and student loans.” Financial advisers also suggest that kids contribute, saving large monetary gifts or a portion of their earnings from part-time jobs.

When your child is in the ninth or 10th grade, sit down for a talk about college and the financial picture. Students need to understand what it takes to get them through college.

Seek financial aid, scholarships, grants or other assistance, but don’t over estimate what you’ll get. The good news is that more than half of all students receive some kind of financial aid according to the College Board.

All aid and scholarship options should be researched and pursued if appropriate, the experts say, but parents should not assume that this aid will be easily available.

To sum it up: one third saved before college, one third from current income and financial aid, and one third from parent and student loans.

Saving For College Now You Are There

The best way to budget money is to try and figure out how much money you have for the school year (estimate), and divide it by the number of weeks you will be in school for the year, or you could even divide it by semester or quarters.

This is the more precise way to budget money. Then make a list of everything you spend money on for the first month. From there you will have more of a blueprint of how you want to develop and set aside monthly funds.

The biggest tip to earn money to be able to work with and budget is to work, work, work, during summer vacation and breaks from school! Save most of the money you make, and then when the school year starts you will know where the monthly money goes with your previous made budget.

You may not even need to have a job during the school year if you make enough money in the summer to budget out and support all of your monetary needs.

Overall, figure out where you will be getting money from each month, or in some cases every semester or quarter, and disburse it accordingly. For example, some students get money from financial aid, parents, jobs and loans. The first year is the most challenging.

Think of everything you will need to pay for, from insurance and school bills, to cell phone bills and groceries. Once you can see everything on paper, you will be able to figure out if the money you have to work with every month will be enough for you to survive on.

Each month becomes easier for you to know exactly how much money is needed to set aside due to the draft or budget you have kept prior.