Sunday, 18 August 2013

How to Consolidate Student loans

How to Consolidate Student loans

Author: Jeff Ingram
Consolidating student loans allows a consumer who has more than one student loan to take out a new loan to fully pay and replace some or all of the previous unpaid student loan amounts. Unlike most types of consolidation loans, student consolidation is imbued with great public interest as such the government has deemed it fit to step in and provide guidelines as well as mandatory minimum requirements. This article will discuss how a consumer can go about consolidating student loans in as simple and straightforward a manner as possible. This article will also provide a few reference sites for more detailed student loan consolidation procedures, tips and techniques.

Student Loan Consolidation: Prepare

Student loan consolidation starts by determining the number, types of student loans as well as the particulars of the same. The best way to get these information is to get the same from the copy of the contract of loan. Below is a 5 step process of loan consolidation:

1. Apply for student loan consolidation before falling behind: Start applying from different providers a few months before the anticipated inability to make payments. This is because interest rates for current student loan consolidation programs are much lower than for those already in default. At the very least, if you are already overdue then you need to apply and get approval as soon as possible to minimize your losses. However prioritize government subsidized and/or regulated loan consolidation entities to increase your chances of getting the best rates with the best terms of payment. Remember, to have the necessary documents in order to speed up the application process.

2. Determine your loan amount: The trick is finding a loan amount that is enough to pay for all of your student loans after total cost have been removed. It is best to peg your loan amount as high as you can takeout and pay based on your expected loan payment period. However if your loanable amount is not able to pay for all student loan debts then it would be best to select the one with the least advantageous terms and apply the loanable amount to the same.

3. Plan for Alternatives: Applying for student loan consolidation does not ensure approval. This is why it is important to plan for alternatives. Some alternatives are bankruptcy, sale of one or more properties, a HELOC, etc.

4. Plan Ahead: Even prior to graduation you must already prepare to find the best paying job in the least amount of time. Of course you must also consider your area of interest and expertise. By doing this you increase your chances of paying the consolidated student loan.

5. Alternative Sources of Income: Finding a way to earn income before and immediately after graduation, even if it is just a temporary job will help a lot in keeping you within budget. Tip, save up as soon as possible in order to have a bit of liquid cash to use in case job hunting takes longer than expected.

Student Loan Consolidation: Reference

In order to get the best deal you need the most relevant and up to date information about student loan consolidation. This can be had from several government websites related to the education department, blog sites, forums, even social networking sites. The goal is getting information from several sources in order to ensure an accurate and wholistic approach.
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