However, it is important to note that Federal student loans and private student loans cannot be merged together through consolidation. They are usually structured with specific design and benefits. So trying to consolidate them into one would mar the purpose of the effort. One can consolidate private student loans and Federal student loans separately. Consulting an expert of a consolidation agency will help you understand the process better.

Student loan consolidation can bring your entire debts under one roof. In order to attain the most benefit of this process, you should enroll in a debt consolidation firm. After FTC institutes new regulation, no consolidation firm can charge you upfront fees. So by their help you can have your multiple debts consolidated into one. You will make a single payment to the consolidation firm. From that payment they will disburse the money to your lenders. Let’s check the benefits you get-

•  Your overall interest rate will be reduced through consolidation.
• Late fines will be forgiven.
• You will be paying through a single payment gateway.
• It will eliminate your hassle to track the records of your different debts.
• Debt consolidation will chip away your monthly installment fees.

However, before you sign your name in any consolidation firm, it is your responsibility to check the reputation and service that company. With occasional news of scams, we have to be more cautious about where we are actually getting into. Sometimes it is heard that you pay your consolidation firm but they do not make timely payment to your original creditors. That is way, after reviewing their track record you should move forward.

It’s not the same any more. Students who graduate in bad economical times often find themselves looking for jobs and finding none or they’d have to take jobs that are low payed. Many recent graduates find themselves just in that situation. So before you sign any loan papers, talk to a professional. Here are some loans that will not be eligible for consolidation:

• Loans made by a state or private lender and not guaranteed by the federal government
• Primary Care Loans
• Law Access Loans
• Medical Assist Loans
• PLATO Loans

Source: U.S. Department of Education

There are many ways in which you could save money during your first year of university. Here, we will take a look at just a few:

Find discount vouchers

This is an excellent way for you to save money on your shopping – and sometimes even get things for free. Vouchers are often handed out in shops, round city/town centres but the best place to get vouchers is definitely on the web. There are various websites that offer vouchers and codes, all you need to do is download them!

Vouchers to look out for include:

• Buy one get one free vouchers
• Vouchers entitling you to money off certain products
• Free trial vouchers, etc.

Vouchers codes can help you reduce the amount you spend on your shopping, which should help you lower the amount of debt you graduate with.

Be careful how much you spend on nights out!

Many students like a drink at university, and you may too – but it doesn’t have to cost you an arm and a leg. When I was at university, a few of my friends had actually got into debt paying for nights out over the term (using their overdrafts to fund their social life) – so that is definitely something to avoid!

A good way to save money on nights out is to find bars with promotional offers on. Some bars will offer free drinks to the first 100 people who go there, or even £1 specials on certain nights of the week. However, just because they cost less, you shouldn’t drink more – know your limits and always drink responsibly!

Finally, at the end of the night, a lot of students pay for taxis back to their houses/halls of residence – this can often cost in excess of $40, so why not share the taxi with a group of friends, if 4 of you got a taxi home, it would only cost $10 each. On the other hand, why not nominate a driver for the night? (someone who doesn’t drink for the night). That way, you won’t need to pay taxi fares and could save yourself hundreds of pounds throughout the course of your degree, meaning you will lower the overall amount of debt you are building up while at university.

This student debt guide on ThinkMoney.com’s website is really helpful if you are looking for more info and tips on managing your money at university.

• Subsidized Federal Stafford Loans
• Direct Subsidized Loans
• Subsidized Federal Consolidation Loans
• Direct Subsidized Consolidation Loans
• Federal Insured Student Loans (FISL)
• Guaranteed Student Loans (GSL)

Source: Department of Education

While these loans may not be included in a Direct Consolidation Loan, they may be considered in the calculation of the maximum repayment period under the Graduated or Extended Repayment Plan. These include but are not limited to the following:

• Loans made by a state or private lender and not guaranteed by the federal government
• Primary Care Loans
• Law Access Loans
• Medical Assist Loans
• PLATO Loans

So if you are still in school and are planning on taking out more loans or going to Medical or law school, study your options.

Source: U.S. Department of Education. www.ed.gov

If you’ve recently graduated from college, you’ve probably been bombarded with mailings and advertisements urging you to refinance (or consolidate) your student loans right away. But wait, what is loan consolidation? And why should you do it?

If you’ve just graduated from college, you’ve probably got a number of different student loans, all in different amounts from different lenders at different interest rates. Loan consolidators (which can be private banks, lenders or government agencies) pay off all your individual loans in exchange for a single loan in the same amount issued to you. So now instead of all those different loans, you’ve got one loan that you repay to the consolidator.

Refinancing your student loans reduces your monthly payments and locks in a fixed interest rate. In most cases, student loans have variable interest rates set a few points below prime. As interest rates go up, so will the interest rate on your loans. When you refinance your loans, you lock in an interest rate based on the current market conditions that will be set for the life of your loan. Therefore, it’s important to evaluate the market before making the decision to consolidate. Right now, interest rates are low, but they’re going up and most economists predict that they’ll continue to go up for awhile. So for many people, this is a good time to refinance.

Your credit history will also determine your eligibility for loan consolidation programs. Loan consolidators can be picky in who they accept for their programs, so the option to refinance is usually only available to individuals who have established good credit by paying their loans back on time. If you’ve missed payments or made payments consistently late, you may not be offered the best terms, if you’re accepted at all. If your application is denied the first time, call the consolidator and talk to a loan officer about the reason for your rejection. The officer may offer you advice on how to qualify for their program at a later date.

If you decide to refinance, be sure to consolidate federal loans and private loans separately from each other. When you consolidate your loans, you’re typically offered a rate that’s 1-2% lower than the average rate of your loans. Federal student loans often carry much lower interest rates than private loans, so consolidating them together can bring up the average interest rate of your loans and leave you with a higher fixed rate locked in. If you only have one private loan, it may not make a difference, but it’s important to assess your options before committing to refinance.

Is there anyone who shouldn’t consolidate? Let’s look at a scenario. Tracy has 2 loans for $5,000 each that are scheduled to be paid off within 5 years. She can afford to make her monthly payments but wants to see if she can save a little extra cash each month by consolidating. She finds out that she can refinance the loans into a $10,000 consolidation loan to lower her monthly payments and she’ll be eligible to extend her payments over 8 years. But because she’s extended the life of her loans, she’ll be paying interest over a longer period of time and may wind up paying more overall than if she had kept her loans as they were.

It is tempting to pay less per month but if you can afford to pay off your loans in a shorter period of time, then you’ll likely save money on interest in the long run. Obviously every situation is different and you won’t find all your answers in a short article like this. But if you think loan consolidation might be right for you, check out the Student Loan Network’s site at Studentloanconsolidator.com for more information or speak with a loan officer or financial planner to see what your options are.

About The Author

This article was published by Sarah Russell on Smart Young Money – a collection of money management resources for teens and young adults. For great information on using credit, managing debt and more for young people, visit http://www.smartyoungmoney.com.

Private student loan consolidation cannot be generally mixed with federal student loans due to the low interest rate on the latter. However, there are several options open to refinance the private student loans by replacing them with another.

The main advantage of doing this is that instead of making several monthly payments, only a single payment is made every month that may be reduced although this will cost one in terms of higher interest amount paid because the single loan may be for a longer period of time.

There is a way to secure a lower interest rate. The private student loan is based on the credit score. If the credit score has improved by 50 to 100 points due to the fact that you have graduated and have a job, then you will be rewarded with a low interest rate.

Another way of getting a better deal when considering a private student loan consolidation is to talk to the holders of your debts. They may be willing to negotiate with you and cut down your interest rate so that they can keep you as their customer.

This type of loan also incurs the same interest that the home equity loan has. You can have a home equity loan at a fixed rate, thus locking in the low interest rate. However sometimes a variable rate looks attractive as long as you can watch it and lock it the moment it is on an upward trend.

Study carefully the terms of the agreement. Find out if the interest rate is variable or fixed. Ask also about fees and if there are prepayment penalties. Find out how much they are for each of the following lenders. Write them down so you can get the best deal from among the following list and whatever other companies willing to do the private student consolidation loan with you:

Key Education Consolidation Loan – $75,000 maximum for non-key debt, $7500 minimum, 10, 15, 30 year repayment term, no prepayment penalty and no fees

Citi Student Loans – $75,000 maximum, $7500 minimum, choose fixed or variable rate, up to 30 year term rate, rate reduction after 48 monthly on time payments, no prepayment penalty

Study carefully the terms of the agreement. Find out if the interest rate is variable or fixed. Ask also about fees and if there are prepayment penalties. Find out how much they are for each of the following lenders. Write them down so you can get the best deal from among the following list and whatever other companies willing to do the private student consolidation loan with you:

Key Education Consolidation Loan – $75,000 maximum for non-key debt, $7500 minimum, 10, 15, 30 year repayment term, no prepayment penalty and no fees

Citi Student Loans – $75,000 maximum, $7500 minimum, choose fixed or variable rate, up to 30 year term rate, rate reduction after 48 monthly on time payments, no prepayment penalty

Study carefully the terms of the agreement. Find out if the interest rate is variable or fixed. Ask also about fees and if there are prepayment penalties. Find out how much they are for each of the following lenders. Write them down so you can get the best deal from among the following list and whatever other companies willing to do the private student consolidation loan with you:

Key Education Consolidation Loan – $75,000 maximum for non-key debt, $7500 minimum, 10, 15, 30 year repayment term, no prepayment penalty and no fees

Citi Student Loans – $75,000 maximum, $7500 minimum, choose fixed or variable rate, up to 30 year term rate, rate reduction after 48 monthly on time payments, no prepayment penalty

Educated Borrower Private Consolidation Loan – $300,000 maximum, $7500 minimum, up to 30 year repayment term, no prepayment penalty and 0 to 5% origination fees

Sallie Mae Private Consolidation Loan – $275,000 maximum, $5000 minimum, 15 to 30 year repayment term, choose between fixed and variable rate, no prepayment penalty and no fees

SC Student Loan – PAL Consolidation Loan – $150,000 maximum, $5000 minimum, 10 to 30 year repayment term, choose between fixed and variable rate, no prepayment penalty and no fees

Next Student Private Consolidation Loan – $300,000 maximum, $7500 minimum, up to 30 year repayment term, no prepayment penalty and 0 to 5% origination fees

Make sure when you are considering to go this route that you clarify all the terms of the agreement as the above may have changed and that all are put in writing and signed by both parties. The best one is the one that fits your needs. There you have some of the possible lenders and the other options when considering to do the private student loan consolidation.

About The Author
Brief Biography: Dr. Guzman worked for the Atlantic Health Corporation and was consultant to St. Joseph’s Hospital, Sussex Mental Health Clinic, and St. Stephen Mental Health Clinic for many years. He was Director of Forensic Psychiatry at Centracare for ten years and published numerous articles, including financial ones in the Journal of the American College of Forensic Psychiatry and other medical magazines.

Copyright © May 28, 2009 Roger Guzman, M.D. (Private Student Loan Consolidation, Is There a Best One?) All Rights Reserved. You may copy and publish this article as long as the text, the author’s name, the active links and this notice remain the same. http://www.debtchallenges.com/

• Standard Repayment Plan – Under this plan, you will pay a fixed amount of at least $50 each month for up to 10 to 30 years, based on your total education indebtedness. This plan may result in lower total interest paid when compared to repayment under one of the graduated plans.If you have not selected a repayment plan by the time repayment begins, your loan(s) will be placed on the Standard Repayment Plan.
• Graduated Repayment Plan – Under this plan, you will pay a minimum payment amount at least equal to the amount of interest accrued monthly for up to 10 to 30 years, based on your total education indebtedness. Your payments start out low, and then increase every two years. Generally, the amount you will repay over the term of your loan will be higher under the Consolidation Graduated Repayment Plan than under the Consolidation Standard Repayment Plan. This plan may be beneficial if your income is low now but is likely to steadily increase.
• Extended Repayment Plan – To qualify for this plan, your Direct Loan balance must be greater than $30,000, and you will have up to 25 years to repay your loan(s). Plan options include:
  • Fixed Monthly Payment Option – You will pay a fixed amount of at least $50 each month for up to 25 years. Repayment under this plan will result in lower total interest paid when compared to graduated plans with similar terms.
  • Graduated Monthly Payment Option – You will pay a minimum payment amount of at least $50 or the amount of interest accrued monthly, whichever is greater, for up to 25 years. Your payments start out low and then increase every two years. Repayment under this plan may provide lower initial monthly payments, although the total interest paid may be greater when compared to plans with similar terms with fixed payments. This plan may be beneficial if your income is low now but is likely to steadily increase.

  **Extended repayment terms are available to Direct Loan borrower with no outstanding principal or interest balances as of October 7, 1998 and with more than $30,000 in Direct Loans.

• Income Contingent Repayment (ICR) Plan – payment amount is based on your income (and your spouse’s income, if you are married), loan balance and family size, and can vary year-to-year for up to 25 years.

Source: U.S Department of Education

• Direct Subsidized and Unsubsidized Loans
• Federal Subsidized and Unsubsidized Stafford Loans
• Direct PLUS Loans and Federal PLUS Loans
• Direct Consolidation Loans and Federal Consolidation Loans
• Guaranteed Student Loans
• Federal Insured Student Loans
• Supplemental Loans for Students
• Auxiliary Loans to Assist Students
• Federal Perkins Loans
• National Direct Student Loans
• National Defense Student Loans
• Health Education Assistance Loans
• Health Professions Student Loans
• Loans for Disadvantaged Students
• Nursing Student Loans