Student Loan Consolidation Programs

Student Loan Consolidation Programs A System That Can Work For You.

The current student loan consolidation programs are intended to give borrowers the opportunity to combine their student loans. These programs essentially pay off multiple loans and take out one new loan in their place. Student loan consolidation programs can decrease monthly payments while also making the repayment process easier to manage. These student loan consolidation programs are governed by federal regulations for interest rates and fees. 

The most important regulation for student loan consolidation programs is a fixed interest rate.  Federal loan interest rates are fixed and when you consolidate your loan that rate is also fixed.  This means that for the entire term of your loan your interest rate will remain the same. So, even though student loan consolidation will add slightly to the final cost of your loan that price will not change with the federal interest rate. Changes in the federal rate could increase your overall cost. The federal student loan consolidation program attempts to protect the new graduates money in other ways too. These programs do not charge any fees for consolidation. The do not charge penalties for prepayment. 

Most types of federal student loans are eligible for consolidation. Some common kinds of loans are:

• FFELP (Stafford, PLUS, and SLS)
• FISL
• Perkins
• Health Professional Student Loans
• NSL
• HEAL
• Guaranteed Student Loans

Some lenders work with the student loan consolidation program to provide discounts for borrowers. These often favor better student loan consolidation rates for the packages offered. The lenders listed below offer either a .25 percent or a .50 percent interest rate reduction.

• Collegiate Risk Management Inc.
• EduCare Financial
• Georgia Student Finance Commission
• GradLoans.com
• U.S. Department of Education
• Vista Financial Inc.

In addition to the above listed discounts some lenders may offer other discounts. For example, if you choose to have your monthly payments direct drafted from your account the lender may offer a discount. There may also be a discount offered for 36 months of on time payments. These benefits will be rescinded if you are late with even one payment. The federal student loan consolidation program allows lenders to compete for your business by making these types of discounts available. 

When you begin to explore student loan consolidation programs you will find that they are set up to help you succeed. The added interest you pay for consolidation is intended to be minor which enables you to continue paying on the student loans until the debt is completely paid off. In addition there are no added fees or prepayment penalties which allows the borrower more freedom to consolidate into a plan that suits their personal needs.