(Prudent Press Agency)---College tuition is on the rise and students and parents alike are seeking additional methods to help pay for the rising costs. Student loans, grants, scholarships and work-study are common ways to supplement or completely pay for the cost of college.
Student loans are probably the most popular of financial aid sources. It's quite usual for one student to take out multiple loans to cover the many expenses of a college education - tuition, books, dorm, transportation, etc.
At the end of a college student's career, many students often find themselves facing a hefty sum of financial payments which start after a six to nine month grace period after graduation.
Many students turn to College Loan Consolidation to eliminate the stress of multiple, high payments, opting for the lower payments and extended terms of a student consolidation loan. While there are benefits to student loan consolidation, students should fully analyze and research all of the aspects of loan consolidation.
College Loan Consolidation - Federal vs Private
Federal loans are more popular than private loans for various reasons. Federal loans have lower and fixed interest rates and other benefits such as grace periods. Private loans are likely to have higher interest rates, and no grace periods.
When consolidating, keep the types of loans separate in order to retain the benefits of the Federal loans. Federal loans provide a cap on the interest rate, along with fixed interest rates.
College Loan Consolidation - Advantages and Disadvantages
It is important to consider both the advantages and disadvantages before applying for a student consolidation loan.
Advantages include:
# The reduction of monthly re-payment amount
# Lower interest rate, which may save you money in the long run
# Organization of loans - make a single monthly payment
Disadvantages include:
# Possibly paying more money over the life of the loan
# Most likely paying on the loan for a longer term - 10 to 30 years
# There are few options to consolidate this loan a second time
If you decide that college student loan consolidation is for you, start by conducting comprehensive research. Begin with federal student loan consolidation programs such as Federal Family Education Loan Program and Direct Loan Consolidation.
They provide fixed interest rates capped at 8.50%. There are also other free resources to help you choose. It is important to shop around and gather as much information as possible in order to make the best decision.
For private student loan consolidation, inquire with various lenders both offline and online. Many times, online vendors provide a lower interest rate and quick approval times.
Perform exhaustive research until you are completely comfortable making a decision, as this decision will make quite an impact on your financial future for years to come.
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