subject: The 5 Student Loans Consolidation Rules You Have To Know [print this page] This short and informative article presents the most essential rules for the student loans consolidation to give you the menu of the topic, which you then can fulfil by studying it more. You will get useful information from the bank, from other lenders or from the qualified loan counselor.
There is one basic rule concerning the lenders. The student loans consolidation should always be free. In the case, when the lender asks an upfront fee, the company is most obviously a scam. So never pay for the consolidation.
1. Only A Graduate Can Consolidate.
There are two times, when you can do the student loans consolidation. The best one is the 6 months period after your graduation or dropping out of school. This time is called the grace period. Another time is after you have started the repayments. The grace period is the recommended one.
There are two main reasons for the consolidation. The main reason is to save money, i.e. to get the lower monthly repayments. When you consolidate the loans after graduation, you will often have the better credit score and together with the longer repayment time it can lower your monthly payments significantly. In all cases it is important to calculate with the expert, shall you honestly save money.
2. You Can Consolidate Only Your Own Loans.
If you and your wife have both the student loans under your own names, the consolidation can be done, but separately, i.e. a man and a wife can consolidate only their own loans. Also if the parents have taken a student loan for the child, the child cannot combine this loan into his or her own consolidated loan.
3. Any Lender Can Be Selected.
When the student of a graduate ponders the consolidation, the target is to save money also through the best offer from the possible new lender. It is easy, because he can ask offers from any lenders, it is not limited in any way.
4. The Federal Student Loan Can Be Consolidated.
But you can consolidate the student loans only once. There is, however, one exception. If the student will take a new loan, he or she can reconsolidate the loans. The interest rate of the new loan will be the weighted average of all the previous loans.
5. You Can Do The Prepayments Without Penalties.
The idea is, that a person will pay his or her student loans as quickly as possible. The loan terms are flexible ones and will allow the earlier payments without any penalties. If you will do this, remember to inform the lender that you want to reduce the debt capital and not to pay the future repayments in advance.
by: Juhani Tontti
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