College Loan Consolidation
A college loan consolidation could be the answer for anyone who is struggling to find a way out from under mounting educational debt. Some lenders claim that students who borrowed to cover the cost of higher education might be able to cut monthly payments by as much as fifty percent. Careful research and comparison could yield interest rates that are both reasonable and fixed. Some online lenders offer the opportunity to apply via the Internet and charge no application or origination fees. One reason that monthly payments are significantly lower with these loans is that the financing is extended over many years. Some financing can continue for up to thirty years. These lenders frequently do not require credit checks or co-signers. Both students and parents of students are eligible to apply for this financing. A consumer should do careful research before moving forward with many of these lenders. Some student debt already carries extremely low interest rates, so the expense of refinancing at a possibly higher interest rate may not be such a good idea. But the borrower who has multiple loans may find a college loan consolidation to be the best way to pay off education related debt.
Student financing can come in the form of federally insured loans as well as private financing. If a graduate has financed an education with federal funds, those funds can be consolidated through a federal college loan consolidation program. The interest rates for these loans are usually fixed. For many former students who are in the process of beginning a new life in the work force, the ability to refinance multiple loans and combine the costs of all the loans into one can provide needed relief from crushing monthly payments. Creating a more manageable way to deal with this debt can make life much easier and possibly even increase personal credit scores. The standard repayment plans on original student debt generally stretch out over ten years. But since many university educations can cost as much as a small mortgage, a thirty year option does not seem unreasonable. The ability to make larger payments than are required can be another benefit of this form of financing. An additional benefit to federal college loan consolidation might be found in the fact that there is generally no penalty for early pay off.
The more flexible options associated with repayment using college loan consolidation programs has made them an attractive option for graduates who are struggling with educational debt. Many lenders offer a faster turn around time on these refinancing opportunities, some boasting a turn around time of as little as thirty to sixty days. Collateral, co-signers, and in some cases, even employment are often not necessary to qualify for this financing. An outstanding educational debt of more that ten thousand dollars is a prerequisite for attaining one of these loans. The interest rates for this financing may be calculated based on a weighted average of the rates that the debtor is currently paying on their existing loans. This average is rounded up to the nearest 1/8 of one percent. Standard federal student loans will usually have a six month grace period following graduation. For many borrowers, applying for college loan consolidation during this six month grace period can result in significant savings. Waiting until this grace period has passed may increase interest rates on any kind of refinancing by as much as six tenths of a percent.
The types of financing that are eligible for college loan consolidation include subsidized and unsubsidized Stafford loans as well as loans that come under the headings of HEAL/HPSL, Parent PLUS, Perkins, and nursing school loans. If a student has already consolidated loans from an undergraduate degree and wishes to refinance again including debt that was accumulated earning a graduate degree, this can be done as well. However, it is not a good idea to consolidate federal student debt in combination with private student debt. This is because the rules that apply to private educational financing differ from those that apply to federal loans. Other types of debt including credit card debt and automobile financing also can not be included in to any kind of federal educational loan consolidation plan. At one time it was possible to consolidate the educational debt belonging to two separate borrowers into one loan as long as those borrowers were married. Unfortunately, this is no longer the case. The Bible discusses the importance of allowing good to prevail. "Be not overcome of evil, but overcome evil with good." (Romans 12:21)
Private educational funding can be consolidated as well, but certain regulations that apply to federal financing do not apply to private debt. For example, it is not possible to defer payments on a private college loan consolidation if a borrower wishes to go back to school or in the event of a financial hardship. Private educational funding does not allow for tax deductions on interest paid. Loan forgiveness for graduates who apply for federal refinancing and choose certain career paths is not available for private refinancing. These career paths include teaching in economic development zones, certain federal volunteer programs, and military service. In the event of the borrower's death, federal loans are forgiven. This is not the case with private financing. The borrower's next of kin must assume the debt. Another difference between federal and private financing is the interest rates. Private educational lending opportunities often come with variable interest rates rather than fixed.
Cheap Debt Consolidation LoanCheap debt consolidation options are offered from a myriad of lending sources especially targeting the financial needs of those facing multiple high interest credit card accounts and personal loans. A cheap debt consolidation loan is one-time financing extended by the lender for the purpose of paying off outstanding obligations accrued by the consumer. Borrowing money with low interest may help to provide freedom from financial bondage. There are companies online that offer assistance and provide online applications. It is also possible to obtain a free quote online.
In order to qualify for a cheap debt consolidation loan, an individual's credit history, monthly earnings, and amount to borrow are considered by cheap debt consolidation companies. Any existing collateral such as real estate, vehicles, and other substantial holdings can be used as surety for a financial agreement. More collateral may mean paying cheaper interest rates. Some lending companies will even provide financing without collateral depending on other verifiable factors regarding the applicant's ability to repay the loan. It is important to understand the responsibility that comes with fulfilling obligations. Finding a way to overcome the temptations that come with buying on credit will bring peace of mind. Ask God to give direction on how to make a life change and to not be overcome with burdens associated with borrowing. "Then she came and told the man of God. And he said, Go, sell the oil, and pay thy debt, and live thou and thy children of the rest" (2 Kings 4:7).
Credit history is important to lending institutions. It goes without saying that most consumers looking for a cheap debt consolidation loan may already be in financial trouble. Experiencing job loss, medical problems, divorce, and other circumstances may lead one to seek financial assistance. Lending institutions online advertise a way out of financial difficulties through cheap debt consolidation. Some offer settlement options to help one get out from under financial burdens quickly. They will work with one's creditors to negotiate faster payoff solutions. Ask about debt settlement when researching options.
If an individual has already begun to pay as much of his or her unsecured obligations as possible, the cheap debt consolidation company favorably views consumer commitments. Secondly, applying for one loan to cover the rest of the outstanding balances implies that the individual intends to pay off the cheap debt consolidation loan. Putting up any existing collateral, even if it is a vehicle, assures the lending company of repayment. It is wise to shop around for the most competitive rates and repayment stipulations. Get several quotes from financial institutions before making a decision.
Advice on debt consolidation can help avoid bankruptcy, stop harassing bill collectors, and create a manageable debt repayment plan. The average American carries thousands of dollars of credit card debt. This, along with car payments, health insurance costs, and an increased cost of living has made many feel like the waves of financial distress are hopelessly crashing down upon them. Seeking advice or assistance in this area can help get one's head above the water and develop a plan for becoming completely debt free.
Consolidation is not for everyone. If burdened with a lot of different indebtedness or paying high interest rates, it might be best to consolidate into a lower-rate, single payment. Hired financial advisers can provide advice on debt consolidation and possible solutions, and can see whether or not this is what is needed at this time. Some states and community agencies offer free advice and these advisers can recommend courses of action and possible resources to pursue.
Many consumers are unaware that many types of bills, such as credit cards, unsecured loans, medical bills, and even auto collections and repossessions can be negotiated. Sources that provide advice on consolidation can give the steps to work with creditors to reduce monies owed. A home owner, taking out a low-interest home equity loan to pay off higher-interest rates, can save thousands in interest fees.
Financial negotiation can be a difficult, long-drawn out process and many people choose to hire a financial services company to assist in the process. Many financial services companies will give free advice on debt consolidation. They will evaluate the current level of indebtedness and come up with a reasonable amount that can be paid monthly toward the indebtedness. Typically they can reduce the total monthly payout amount by as much as 40%-60%. If this avenue of assistance is chosen and one then enrolls with the financial service company, they will then be representative to all the creditors involved.
As part of the advice on the consolidating and reduction plan, they will contact all the creditors and inform them of enrollment. Using the money that has been paid monthly as part of the debt consolidation plan, they will begin working with each of the creditors. They will negotiate the monies owed with that creditor and come to an agreement until all of the debts have been cleared. These services do charge a fee, typically 10-15%; however, the potential savings they might be able to offer by professionally negotiating debts can sometimes cover this fee.
Getting out of debt can seem an impossible task, especially by yourself. Take advantage of free advice on debt consolidation to evaluate options for getting out of the red with finances. Home equity loans or professional debt consolidation services can help with release from the suffocating burden of debts you may have accumulated. "Owe no man any thing, but to love one another: for he that loveth another hath fulfilled the law." (Romans 13:8)