Michael W asked:


To most of the fresh graduates out there, it is a painful issue to pay back the loans they have taken to support their college or university studies. If you are currently paying multiple interest rates to multiple loan agencies, you should know how that feels. Have you ever imagine that you can save thousands of dollars by consolidating your student loans? In fact, you can either go for federal student loan consolidation or private student loan consolidation.

Loan agencies

As the name implies, federal loan consolidation is offered by the federal government. It doesn’t need credit check or co-signer (guarantor) because this loan consolidation program is protected by the federal government.

Private student loan consolidation is offered by banks, loan agencies or credit unions. And depending on the loan agencies, you might need to provide a co-signer or get your credit history check.

How they work

Both programs are meant to combine the multiple loans you have into one loan and extend your loan period so that you can enjoy lower monthly payment. For federal student loan consolidation program, you can only combine your federal loans. But for private student loan consolidation, it is possible to consolidate your student loans together with your personal loans.

Besides that, when you are going for federal student loan consolidation, your interest rate will be lock at the current low interest rate for the whole loan period. For private student loan consolidation however, your interest rate might fluctuate with the market rate. You can try to talk to the loan agency to look at the possibility of getting the lowest interest rate.

Advantages

You can improve your credit score when you consolidate your student loans with both programs. This is because when you have consolidated your loans, you are being seen as servicing one single loan instead of multiple loans.

It is said that you will enjoy lower interest rate with federal loan consolidation. However, you can negotiate with the private loan agencies to see if there is any alternative for you to get a better interest rate.

And for your information, you are allowed to consolidate once with private agency and once with federal agency. So, think properly before you sign up for any student loan consolidation program.

Groshan Fabiola asked:


A student loan consolidation program allows you to work with a company to ensure the best rates and costs for lowering your student loan debt. There are many other benefits that you can take advantage of by applying for a student loan consolidation program. Most importantly, you are able to save more money on your student loans with a student loan consolidation program than if you were to try and pay off all of the loans individually. Because all of your loans have different interest rates, you could be paying more on interest for each loan than if you were to combine them all in a student loan consolidation program.

Besides the money you can save on your loans, another benefit to take advantage of is the amount of payments each month. Because you will typically take out different loans from different companies, you have to come to expect that they will each have their individual payment dates. With that in mind, not only are you going to have to remember each of the loans’ due dates, but you also have to remember what the payment amount is and the interest on them. This can be very overwhelming each month and increases the likelihood that payments get forgotten or missed. In a student loan consolidation program, you can easily set up one payment each month and pay off the single interest payment each month.

Finally, with a student loan consolidation program, you have access to help at any time it is needed. Depending on the company that you work with, there will be ways to contact someone with any inquiries, whether it is through email, phone calls, etc. Having this customer service is helpful because it allows you to work with the company to cater the program to your specific needs. A student loan consolidation program should be easy and convenient for you, no matter what your situation is.

For more resources regarding federal student loan consolidation or even about bad credit student loan and especially about private student loan consolidation please review these pages.