Is It Possible To Consolidate Your Student Loan Debt?

Posted on 07. Nov, 2011 by admin in Student Loan Consolidation

Student loan debts are spiraling out of control as the recent research shows that the average students are graduating with more than $22,000 debt approximately every year. Most of the students have credit card debt along with student loan debt that makes their financial situation further complicated. The credit card companies are luring their new young clients with various lucrative offers. But these young students fail to exercise financial discipline and end up incurring insurmountable amount of debt. Therefore, it is advisable for students with multiple debts to enroll in a credit card debt consolidation program to eliminate their financial woes. When you consolidate your multiple high interest debts into a single monthly payment then you can save a significant amount of money. You can settle your credit card debts but know the trick to eliminate your student loan debt.Identify your student loan debt:Before you plan to consolidate your student loan debts it is advisable to know whether you have taken out a private or federal loan. If you have federal student loan then you need to be careful that there a few restrictions associated with this type of loans. Remember that you are eligible to consolidate your federal student loan when you are still attending you academic institution. The Department of Education allows you to consolidate your federal student loan if you default on your payment. The government shall be willing to negotiate if you agree to repay the loan on the basis of your income under the Income Contingent Repayment Plan.Can you merge your federal and private loans?The consumers consolidating their federal and private student loan has been warned by the Federal Trade Commission. The FTC considers it to be a wrong decision. If you merge these two different loan programs then you might not be eligible for few benefits offered by federal loans. Some of these benefits are like lower interest rate as well as assured deferment if hardship arises. Insurance . Therefore, consolidate your private and federal loans without merging these two different loan programs.Are you eligible for student loan consolidation?If you have private student loan then you might be successful in getting a consolidation loan. But if you have a federal loan then you can easily consolidate your student loan debts. You should be aware that it might be difficult to qualify for consolidation loan if you have poor credit score. If your credit score is above 720 then you can obtain loan on favorable terms.Therefore, it is advisable to consolidate your private student loans as you can make you monthly repayment terms affordable to pay off. In case of a federal student loan you have fixed interest rate and by lower the monthly payment you can pay off the loan effortlessly with consolidating it. 

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