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Saturday, May 14, 2011

Federal Student Loan Consolidation, This Could Be The Best Offer For You

Many students normally apply for loans when they want to join college to help them cater for the various expenses. These loans have seen many students start and complete their studies in a stable environment. When you graduate it is easy to become overwhelmed by your student debt since that is when you start making payments.  In order for you to make your repayments more manageable then you can look at the student loan consolidation option. There are two main types of student loans, federal and private. If you get a federal student loan there are many benefits to consolidating your loan so that you can manage your debts easily.
When you go for federal student loan consolidation you are offered a lower interest rate which makes the repayment process easier. You are also dealing with one loan instead of multiple ones. This is helpful as you will be able to keep track of the payments made since you are paying on a specific date instead of keeping track of multiple dates. There are various types of federal student loan consolidation.
There is the standard student loan consolidation where the loan period is ten years and the monthly payment is fixed. It is suitable if you can afford to pay a fixed amount every month. The extended payment plan is similar to the standard student one except that it has a longer repayment period of fifteen to thirty years. This depends on the amount of the student loan. Then there is the graduated payment plan that can work for you if you are still in school and can only mange to repay once you have graduated and started working. The monthly payments normally start low and steadily increase every two years. This is because the student continues to work, their salary increases accordingly and they may be able to pay a larger amount.
The income contingent plan is based on the student income over a period of years. It is also based on the family’s annual gross income, other loan amounts owed, other assets, mortgages etc.

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