Free Government Debt Consolidation Loans

Creditcard2.com debt solution services provide individualized financial counseling and education to help you eliminate your debt like, student debt, military debt, medical bills etc.

As many students already chase their learns and carriers, institute and college fees possess also increased. As a outcome, most students possess big reader loans via the moment they finalise their studies.

Government debt consolidation bids an choice which may dampen the weight of numerous loans with tall monthly payments.

How Does A Government Student Loan Consolidation Help You Reduce Debt?

A government student loan consolidation enables students towards consolidate excellent education loans into a single novel credit that lower your monthly fees since the terms of fee shall be extended. This provides the students many financial flexibility.

The monthly amortization for the government student loan consolidation shall also be lower since the repayment can be transmit at a longer period, which earns it convenient towards students and parents. The interest rate shall also be decimated since the borrower shall possess a lot of uses blueprint options. It is advisable towards consolidate your credit right as soon as graduation ahead of the grace period ends. This shall allow the borrower towards lock within the lowest interest rate possible onto the loans.

Besides, achieving licenses within certain fields is impossible when you failed towards wage off your reader credit debts. With everybody these impacts, it is otherwise noticeable that preventing a reader credit is none distance towards activate a life as soon as college. If you do arrive back and rob out increasingly reader loans, you shall be able towards consolidate again as soon as graduation.

When Is The Right Time towards Consolidate Your Student Loans?

In the government debt consolidation loan program, it is interesting towards know that there are actually none deadlines related towards it. It is based via the fact that you can apply for the student loan anytime during the grace period or even onto the repayment period. But towards consolidate student loans, a number of considerations ought be paid attention.

To consolidate student loans, you should know that it normally occur during your grace period. At this moment, the lower in-school interest rate shall otherwise be applied towards evaluate the weighted medium fixed rate towards consolidate student loans. And once the grace period has ended onto your government reader loans, the upper in-repayment interest rate shall be applied towards evaluate the weighted medium fixed rate. Given such procedure, it is otherwise understandable that your fixed interest rate for government student loan consolidation shall be upper whether you consolidate reader loans as soon as your grace period.

And when you are interested towards consolidate reader loans, you should know that even whether your reader loans are already within repayment, towards consolidate reader loans is still licenced and beneficial. It is for the reason that when you consolidate reader loans at this moment, you already fix the interest rate onto your government student loans whilst the rates are still originally low.

Student credit consolidation can assistance most borrowers within a lot ways. However, it is still necessary towards note that rates won’t actually stay low without end. It is greatest towards do your innovation already whilst rates are still low.

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Types of Repayment Options

In an effort to give student borrowers more flexibility in how they repay their loans, there are four types of payment plans to choose from. In all cases, it’s a good idea to shop around and compare the different repayment plans from lending institutions because terms vary from one lender to the next, and you might be able to get a better deal from another lender.

The first is the Standard plan, and it’s pretty straightforward: fixed monthly payments for up to 10 years. Second is the Extended plan. This plan allows you to extend the length of loan up to 30 years. However, each lender may have different repayment terms, which largely depend on the balances of your loans. For example, if your loan balance was less than $12,000,a lender may allow you up to 12 years to repay your consolidated loan. If your loan balance was more than $60,000, then your lender would probably give you up to 30 years to pay that back. An important note: other education loans that aren’t being included in your consolidation loan may count toward the “loan balance” calculation that determines the length of repayment for which you qualify.

The third option is Graduated Repayment. This plan is bestsuited for someone who needs lower payments during the first couple of years and then will be able to handle higher payments during the remaining years. Again, different lenders offer plans that mix-and-match levels of payments, for example, interest-only payments for the first couple of years, followed by higher payments that pay both the interest and principal. However, any time you take off from paying on the principal of the loan will probably increase the loan’s total amount.

A fourth option is Income Sensitive / Income Contingent. In some situations, lenders will base your payments on your monthly income, amount you borrowed, your employment status, and other factors.
Your payment will adjust annually as your work situation changes. Requirements and terms will vary with each lender. It’s relatively hard to qualify for this plan, but if your income is going to be very low, you might want to check out this option. As with the Graduated Repayment plan, this plan will probably increase the total cost of the loan (principal + all interest).

SOURCE: www.simpletuition.com 

When to CONSOLIDATE

The answer to that question is primarily based on where you are in your life—whether you’re still in school or have become an alumnus. If you’re in “repayment” mode, meaning you’re all done with full-time
school and the student loan bills are starting to come, then you can consolidate now. If you’re in a “grace period” (the time right after you graduate but before you have to pay your student loan bills), you can
consolidate. If you’re still enrolled in the program for which you borrowed, you can’t consolidate.

No matter your loan status, however, there is one date on the calendar that you should be aware of: July 1. On that day each year, interest rates for all but the newest federal student loans are reset. Keep an eye out for information about what the new rate will be.

Indications are that it will increase slightly in 2007, so consolidating prior to July 1 will ensure that you consolidate at the rate in place before the change. So long as your application for federal consolidation is complete and submitted before the deadline, you’re good to go. Note however, that in general, it takes between 30 days to 90 days to complete the loan consolidation process. Once your loan is consolidated, your first payment will be due in 60 days.

SOURCE: consolidationcomparison.com

Student Loan Glossary

Here are some glossary terms you should know:

In-School—When you’re still in college as a full-time student.
 

Grace—The time after graduation when you are not required to
start repaying your loan. For Stafford Loans, this is six months;
for Perkins loans, it’s nine months. 

(There’s no grace period on a PLUS loan.)

Repayment—Following the grace period, this is when you
begin repaying your student loans. 

Delinquency—When you fail to make a payment when it’s due.
 

Deferment—When your lender allows you to temporarily
postpone your payments due to economic hardship.
 

Forbearance—When your lender allows you to temporarily
postpone paying the principal on your loan, though interest on
the loan still accrues.
 

Default—When you fail to make your payments or abide by the
terms of your loan. Defaulted loans are reported to credit-reporting
agencies, which is really bad for your future credit scores.

Federal Consolidation VS Private Consolidation

Federal consolidation loans are a mechanism to refinance federal education loans only. Private consolidation loans are a way to refinance private education loans only. The main difference is that a federal consolidation loan comes with a fixed interest rate that follows a set federal formula, while private consolidation loans come with a market rate that may be fixed or variable.

If you consolidate both federal and private loans you should make sure to keep them separate – refinancing a federal loan with a private consolidation product will most likely result in a much higher interest charge than you’d pay if you kept it separate. Private consolidation loans might be an attractive option for you.

Here are some of the benefits you might find:

Longer repayment term (up to 30 years in some cases)
Lower monthly payment
One monthly bill

Potential release of cosigner from the original private loans but weigh this decision carefully, as a longer repayment term usually means a greater cost of borrowing (you pay interest for more years). Also, make sure to consider the interest rate on the private consolidation loan versus your existing private loans – rate structures can vary widely.

SOURCE: consolidationcomparison.com

STUDENT LOAN CONSOLIDATION: Borrower Benefits

Many lenders offer incentives to encourage borrowers to choose their loan product. These incentives are commonly referred to as“Borrower Benefits,” and they come in several forms.Automatic Some Borrower Benefits are “automatic,” meaning that you automatically receive the incentive or benefit without
having to qualify.

Earned Some Borrower Benefits are “earned,” meaning that you must qualify for them first. A common earned Borrower Benefit is an interest rate reduction for setting up automatic payments; another is an interest rate reduction for a pre-determined number of on-time payments. Note that “earned” benefits can
sometimes be “un-earned” if you stop meeting the requirements.

Ask your selected lender for details about borrower benefits, including requirements to qualify and/or to later be disqualified or them.

Examples of Borrower Benefits can include:

Interest Rate Reduction: Usually a percentage by which the interest rate on the consolidation loan will decrease after a certain number of months of ontime payments.

Principal Reduction: Usually a percentage of the original principal balance of the loan that is deducted from the amount owed–earned after a certain number of months of ontime payment.

SOURCE: consolidationcomparison.com

List of Federal Repayment Options

 Here is a list of Federal Repayment Options available:

1. Standard payment: Standard payment is the payment schedule every borrower is automatically assigned. (FFEL borrowers have 45 days to switch from this plan after being notified by their lenders to choose a repayment plan.) Standard plans have the highest monthly payments because the terms are between five and ten years, which means you may pay less on your loan overall. Note that your monthly amount due may fluctuate if you have a variable interest rate.

2. Extended payment: If you have total outstanding student loans that exceed $30,000, you may repay your debt on a fixed or graduated payment schedule for up to 25 years (most repayment plans are within the 10 year range). Because you're extending the term of the loan, your monthly payments will be quite a bit lower, but you will pay more in interest over the life of the loan.

3. Graduated payment: Graduated payment is exactly what it sounds like, with payments starting out low and gradually increasing during the repayment period. Graduated plans are helpful for borrowers who are just beginning their careers and are more likely to have higher incomes over time.

4. Income Contingent Repayment: This type of repayment plan is another one that is essentially what it sounds like. Available only to Direct loan holders, payments are calculated according to income and your total amount of debt. The loan term is up to 25 years and is regularly adjusted according to any changes in income. Payments increase as income increases, but your required payment can be no greater than 20% of any earnings above the poverty level. When the 25 year term is over, if there is a balance remaining, it will be discharged.

5. Income Sensitive Repayment: Under an income sensitive repayment plan, borrowers with FFELP loans are allowed to make payments calculated according to gross monthly income. The loan term is 10 years long.

6. Income Based Repayment: Income based repayment is a more generous option than the two prior income-based repayment plans, but will not go into effect until July 1, 2009. Unlike income-contingent repayment and income-sensitive repayment, it is available in both the Direct Loan and FFELP programs. The payments operate much like the above income based repayment plans, but the payments are calculated based on a lower percentage of your income.

7. Perkins loan payment: Perkins loans function differently than other federal loans. The government establishes a consistent minimum payment per month, which is currently $30 for an NDSL loan or a Perkins Loan made before October 1, 1992 and $40 after that date.

SOURCE: www.mahalo.com