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STUDENT LOAN CONSOLIDATION
Consolidation is the act of combining many student loans into one loan. You must take action to consolidate. Grouped billing of loans by the lender is not consolidation.
The rules regarding consolidation have changed numerous times over the past few
years, and will be changing again soon. Prior to July 2005, when you consolidated
your loans, you converted your numerous variable rate loans into a single fixed-rate
loan. The interest rate on your fixed rate loan was a weighted average of the interest
rates of your variable rate loans, rounded up to the nearest 1/8 %. As of July 2005, the interest rate is not fixed. It varies each July with the 91-day T-Bill. But all of this will be changing again in July 2006. According to the sources I’ve read, consolidated loans
will once again be fixed rate, but the interest rate will be fixed up around 8.25%. Of course,
I’m waiting for July to roll around so I can find out what really happens there.
When you consolidate loans, you still have a federally guaranteed student loan, and you still have the deferment and forbearance options you had available to you on your numerous individual loans. In fact, when you consolidate, you have a new student loan, and you start over with five years of qualified deferment and up to five years of forbearance. Good
show! This time, don’t abuse the forbearance, it makes your loan grow.
When you consolidate your loans, you may be able to extend your repayment period. Typically, consolidated loans have a repayment term of twenty years instead of ten, which makes the payment lower. Unfortunately, consolidation of your loan, if your spouse provides qualifying income and signs the loan documents, may trigger conversion your personal loan into community property. Be careful.
Additional Student Loan Consolidation information is included in "Surviving Your Student Loans".
Student Loan Consolidation:
Student Loan Topics:
Master Promissory Note, Student Loan Deferment, Student Loan Forbearance, Student Loan Consolidation, Student Loan Discharge, Student Loan Grace Period, Subsidized
Student Loans, Unsubsidized Student Loans, Stafford Student
Loans, Perkins Student Loans, Direct Student Loans, PLUS
Student Loans, William G. Ford Student Loans, Student
Loan Delinquency, Student Loan Default, Student Loan Payment
Options, Student Loan Case Studies, Student Loan Management,Additional Reading Relating To Student Loans, How Do I Get A
Student Loan, How Do I Confirm the Status of my Student Loans, Why
Do I Owe Twice As Much As I Borrowed On My Student Loans, Pending
Changes Affecting Student Loans, Bankruptcy and Student Loans, Student Loans And Your Credit Report, Student Loans, Gifts.
