03.22.11 | From our Archives: Consolidation

Posted in Loan Consolidation by Student Loan Network Staff

For students about to graduate, you may want to check out the article New Grads, Start Thinking About Consolidation. This will give you helpful tips on why consolidation can be a good option.

Conversely, the article What NOT to do when Consolidating your Student Loans tells you just that. It provides useful information on the types of situations where consolidation might not be the best option.

While consolidation for federal loans is usually a good idea, it may not be so black and white with private loans. In the current economy, private lenders have been reluctant to grant consolidation loans. Should I Consolidate my Private Student Loans can help students to decide how and where to go to consolidate their private loans.

Still have questions about consolidation? This post may be able to help. From Our Forums: Consolidation Question Quartet! answers a few common questions about consolidating federal loans. Maybe it’ll answer yours. If not, you can always check out the Financial Aid Forum’s consolidation help section.

Hopefully these articles will proves useful in the upcoming months. Remember, if you need more information regarding loan consolidation, visit StudentLoanConsolidator.com.

07.23.10 | It’s July 23rd, Do you know where your loans are?

Posted in Consolidation, Loan Consolidation by Student Loan Network Staff

If you’ve ever seen those ads on TV late at night asking, “Do you know where your kids are?” you know what I’m talking about. If you haven’t, well, now you do!

Just as important as knowing what your children are up to at night is the status of your student loans. Specifically, their interest rates and repayment plans. Did you know that because nearly all private student loans have variable APRs, your interest rate could have changed several times in the past 2 years?

One way to make it easier to keep track of your loans is to consolidate them. Of course, there are a lot more benefits than just having one bill and interest rate. Here are some more loan consolidation benefits:

  • A credit score boost
  • Lowers your monthly payments up to 50% (at the expense of more interest overall)
  • The interest rate for private consolidation can actually end up being lower than the average of your consolidated loans (saving money!) based on credit

Sound good to you? If so, then get started on a loan consolidation!

06.09.10 | New Grads, Start Thinking About Consolidation

Posted in Loan Consolidation, Student Loans by Student Loan Network Staff

If you have recently graduated from college, your student loans are probably fairly low on your list next to finding a job. However, one thing you should keep in the back of your mind is consolidating your student loans once your grace period is closer to ending.

Consolidation has two main benefits that can be of enormous financial help to you both in the present and the future: the improvement of your credit rating and lower net monthly payments. (more…)

05.27.10 | Private Loan Monthly Payment Too High?

Posted in Private Student Loans by Student Loan Network Staff

Private student loans are a great way to cover some of the excess costs of going to college. But repaying a private student loan can be difficult. Interest rates are generally higher than with a federal loan, and if you didn’t get much help from the government, you might have taken out an exorbitant amount in private loans and now can’t afford to make your monthly payments. Fortunately, there are options.

First, if you have multiple private loans, you should consolidate. Consolidation stretches out your payments giving you a lower monthly payment. Be sure to do consolidate federal loans as well.

Attempt to lower your federal payment. While you unfortunately can not consolidate private and federal loans together, there are ways to lower your federal payment if paying back your loans becomes an issue. If your federal loan payment is more than 10% of your monthly income, you may be eligible for income-based repayment. You may also look into graduated repayment, which starts you off with lower monthly payments that gradually increase over time.

Talk to your private loan lender. Your lender may be able to offer repayment options that assist you if you are having difficulty making your monthly payments. For example, you could request making interest-only payments for awhile, or try reconsolidating with a co-signer for a lower interest rate.

05.14.10 | Private Student Loan Repayment Benefits

Posted in Private Student Loans by Student Loan Network Staff

Girl pondering loanRepaying a private student loan should be a top priority when you leave school. Interest rates tend to be higher and so you will be looking for methods to pay back the loan as quickly as possible. Fortunately, many lenders offer some excellent repayment discounts. Private loans tend to scare some students away, but as long as you’re an informed consumer, there’s no need to be afraid. Here are some of the benefits private loans can offer students.

Cosigner Release

One of the biggest roadblocks in obtaining a private loan is getting a cosigner with good credit. Since most students have not yet built enough credit to apply on their own, a cosigner is usually required, or at least advised. The problem comes when you can’t find someone willing to cosign for you. Luckily, to alleviate the concerns of the cosigner, banks have developed the cosigner release option. This allows cosigners to be released from the contract after the student has made a number of on-time payments. This way, should the student default or fall behind, the cosigner is no longer under an obligation to repay the money.

Auto-Debit Interest Rate Reduction

Not only is setting up an automatic payment a savvy financial move, it can help save you money and not just by avoiding late payment fees.  Generally, having your bill payed automatically can lessen your interest by 0.25 – 0.50%.

Graduation Reduction

Another benefit that many lenders now offer is a reduction for students who hold a degree. Discover for example, takes off 2% balance reduction and SunTrust offers a 1-2% reduction (depending on which loan you hold).

Deferment Options

Like federal loans, private loans also offer the option to defer while in school. Plus, they provide a grace period before students must begin repayment, just like a federal loan, though the length of the grace period can vary slightly.

05.07.10 | Should I Consolidate my Private Student Loans?

Posted in Loan Consolidation, Private Student Loans by Student Loan Network Staff

Federal student loan consolidation is fast, easy, free and highly recommended to lower your monthly payment. Private student loan consolidation is a bit trickier. Here are some notes to remember if you choose to go down this road.

  • For starters, not everyone who applies for private loan consolidation will be accepted. One only a few lenders, such as Wells Fargo and Chase, will even handle a private loan consolidation.
  • The aforementioned lenders and almost any bank that will consolidate your private loans will likely require a minimum amount to be consolidated.
  • If you can get a private student loan consolidation it may lower your monthly payments significantly, but the lifetime interest of the loan will greatly increase. It is highly recommended that once your grace period expires and you begin the process of repayment, that you aim to pay down your private loans as quickly as possible to avoid the spike in interest.

Have questions about private loan consolidation? Visit the Consolidation section of our Financial Aid Forums!

04.08.10 | A Quick Consolidation Tip

Posted in Loan Consolidation by Student Loan Network Staff

Looking to consolidate federal and private student loans? While you can’t consolidate them together – and you wouldn’t want to anyway, you can take the consolidation of both types of loans to your advantage.

You can consolidate your federal student loans any time after you graduate or drop below halftime enrollment.  Always consolidate federal loans first. Consolidating your loans will improve your credit rating, and when you go to consolidate your private loans, which are credit-based, you will have a better score and most likely get a lower interest rate.

For more information on loan consolidation (federal and private), visit www.StudentLoanConsolidator.com.

03.17.10 | Should I wait to consolidate?

Posted in Loan Consolidation by Student Loan Network Staff

A question we receive often in our financial aid forum and through email is whether or not a student can consolidate their loans multiple times. The answer is rather simple: no if you are not taking out more, and yes if you are.

03.04.10 | Which private student loan is right for you?

Posted in Private Student Loans by Student Loan Network Staff

If you’re interested in taking out a private student loan that could hopefully bridge the gap between your federal loans, scholarships and your total cost of education, chances are you have some questions. The first of which is almost certainly, “which private student loan is the right one for me?”

To answer that question, it is best to know  what your current financial aid situation is. There are a bevy of offerings out there, and no two are alike. Use this handy checklist to get an idea which loan fits your lifestyle and financial situation.

  • Can you afford to start paying back the loan now, or do you want to wait until after you graduate? Some private student loans offer less fees or no fees if you start paying early.
  • What kind of interest rate will I get? Unfortunately, you can’t determine your exact interest rate until you apply. But one way to get a good idea is to check your credit report.  Do you have a number of late payments or overdrawn accounts? If so, you likely will get a higher interest rate.
  • Can you afford to pay an origination fee?
  • Do you plan to consolidate? Hint: Yes, you probably should.
  • Will you use a cosigner? Using a cosigner can help you get a better interest rate down the line.

Click here for a complete private student loan comparison.

Apply for a private student loan here.

11.20.09 | Am I Refinancing or Consolidating My Student Loans?

Posted in Consolidation by Student Loan Network Staff

First off, it’s not actually refinancing that you are doing as much as it is consolidating your student loans. Still, you will have a new interest rate and loan terms extended to you which is what refinancing is all about, so it is very similar.

The main difference between traditional refinancing and federal loan consolidation is how they arrive at your interest rate.  With traditional refinancing, like in the case of a mortgage, your FICO score, debt to income ratio, and earnings are all important factors.

When it comes to federal loan consolidation it is simply the weighted average of your loans rounded up to the nearest eighth that is fixed for the life of the loan.  The repayment term is dependent on your loan volume.