STUDENT LOAN CONSOLIDATION
Student loan consolidations or student loan refinancing programs is an effective and convenient debt clearance strategy. Aside from paying off the debt, a student could save a lot through the student loan consolidation since it would be offered with lower rates and would require the student to pay much lower monthly repayments. However, you would have to know all the pertinent facts first before applying and getting a loan, which is student-consolidated loan.
1. Financial Counseling
Consolidated loans would not be the only solution to manage student debt. There are a lot of other viable options, which are available in the financial aid office. So it is essential that students seek the advice of a financial counselor prior to getting a student consolidation loan.
2. Refinancing in the grace period
Federal loans like Stafford loans give students a grace period of six months. This grace period could be availed of even when the student has already graduated college. Loan repayment would just start after the grace period ends. This would be the best time for student loan consolidation, as rates in the grace period are much lower compared to the rate when the grace period expires. Upon employment of the student, the interest rates would be based on his or her income.
3. Lender Initiatives
There are a couple of financial organizations, as well as private lending firms who offer different packages and promotions to attract customers and remain competitive in the market. These would usually include flexible repayment options, reduced interest rates, auto-debit option and a lot others.
Also a useful strategy would be to go for a loan with variable interest in the first few years. After the interest rates lowers to a considerable level, this variable interest loan could be switched into a fixed rate loan. However, keep in mind that private and federal student loans should not be combined if you are looking into getting a consolidated loan.