Student Loan Consolidation - Do It the Right Way!

Student loans are such a pain. Of course they give you the opportunity to get

a degree that you wanted, but then the time comes when your mail box is flooded

with bills from several lenders and you are ready to scream. Luckily for you there

is something you can do to make it less of a hassle. Applying for a student loan

consolidation program will greatly benefit you. Find out how to consolidate your

student loans the right way.

Why consolidate?

First, you will be paying off one loan instead of several. It is much more

convenient; you will receive one bill every month and won't have to worry about

missing a payment and being slapped with late fees. Also paying some of your

bills late can hurt your credit history. Consolidating all your student loans

into one will help you avoid this.

Second, loan consolidation can save you a lot. The goal of consolidation is

to let you make lower monthly payments. The interest rates are also lower, than

on the loans before consolidation. This is very important when you are just

starting a new career. Saving on your student loan payments will leave you with

extra cash for other important things.

Does bad credit prevent you from applying for loan consolidation?

If you have a bad credit history, it usually won't prevent you from being approved

for federal loan consolidation program. With private lenders bad credit score

can be a bit of a problem. So if you have any federal loans, consolidate them

first. Then make sure that you take care of your monthly payments before their

due dates. This will improve your credit score, and you won't have any troubles

consolidating with a private lender. It will also help you get discounts to

save even more.

How to find the best consolidation student loan rate?

The rate shouldn't concern you because according to the federal law, all private

lenders have to offer exactly same rate as FFELP (Federal Family Education Loan

Program). Your individual rate will depend on the average rate off all outstanding

student loans you currently have.

Some lenders advertise very low rates. But you have to bear in mind that most

lenders offer certain benefits and discounts, and the rate advertised is usually

what you get after a discount is applied. So if you are not eligible for the

discount, your rate will be higher.

Most companies clearly state discount eligibility criteria, for example always

making your payments on time or setting an automatic withdrawal from you account.

But there can be other criteria as well, not mentioned until you actually apply

for consolidation with this lender. So the only reliable way to find the best

deal is to ask for quotes from several banks and other private lenders and compare

them.

Another thing young graduates have to be aware of is hidden fees. When you

apply for a federal loan consolidation program there will be no additional fees.

Many private lenders also don't have any fees. However, some lenders charge

you additionally for consolidation, so you will have to ask if there are any

additional fees.

Finding the best deal on your student loan consolidation program might take

a bit of research, but since we are talking about thousands of dollars, savings

can be substantial too. The easiest way to get your quotes is to visit lenders

websites and ask for a quote online. And remember, you are allowed to consolidate

your loans only once, so it is important to make the right choice the first

time.

Tanya Turner is a publisher of Loan Consolidation Guide, where you can compare consolidation offers by several lenders. The Guide also offers tips and advice on how to save the most when consolidating your loans.