Student Consolidation Loan During Grace Period
By Tanya Turner
Student consolidation loan is such a pain. Applying for a student loan consolidation program will greatly benefit you. Find out how to consolidate your student loans the right way.
Why consolidate?
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, student consolidation loan can save you a lot. The interest rates are also lower, than on the loans before consolidation. Saving on your student consolidation loan payments will leave you with extra cash for other important things.
Does bad credit prevent you from applying for student consolidation loan?
If you have a bad credit history, it usually won't prevent you from being approved for federal student consolidation loan program. With private lenders bad credit score can be a bit of a problem. So if you have any federal loans, consolidate them first.
How to find the best student consolidation 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. 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. When you apply for a federal loan consolidation program there will be no additional fees. Many private lenders also don't have any fees. The easiest way to get your quotes is to visit lenders websites and ask for a quote online. Find out what grace period is and how you can use it to greatly reduce your debt with student consolidation loan.
What is a grace period?
Grace period is the time between your graduation and the time when you start receiving bills for your student consolidation loan. Usually grace period is 6 month, but it can be different for every loan. You will have to check your loan papers to confirm how long your grace period is.
If you have not consolidated your college loans already, grace period is the perfect time to do so. If you go for a student consolidation loan program during your grace period, with most lenders you can lock a lower rate for your new consolidated loan. If you want to consolidate after the grace period, your rates will be higher.
Why go for a student consolidation loan?
There are many benefits of consolidating your loans. First, the interest rate on your new consolidated loan will be lower than the rate on your existing loans. This means lower monthly payments and shorter time to repay your loan. Second, you will get one bill instead of several, so it is more convenient. Third, most lenders offer special discounts and benefits when you consolidate.
Are there any disadvantages of loan consolidation?
So in theory it is possible that in the future your loan rate will go down and become lower than your consolidated rate.
How consolidation during grace period works?
If you took a federal student loan, consolidating it during your grace period would give the same results as consolidating while you are still a student. In a sense grace period is a time when your student status is deferred or postponed by six months. In-repayment rates for consolidation are always higher.
If you have several loans by private lenders, the situation is a bit different.
Consolidated loans don't have grace periods
One thing you have to know is that consolidation loans don't have any grace period. So if you think that you might need some time to find work, it is better to wait with consolidation before your student loan come close to the end of their grace period.
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