Consolidate Your Government Student Loans

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One of the biggest burdens faced by today's students is the repayment of expensive student loans. In a day where room, board, tuition, and books can push college bills up past 20, 30, even 40 thousand dollars per year, many students are finding themselves in serious debt upon leaving college. Even with a good job lined up, you may find that you will be repaying your loans well after leaving school, after you are married, and still be paying your student loan off as your children get ready for their college education! Who needs that? You certainly don't! There may be a way for you to tackle your student loan debt in the form of a government student loan consolidation. Please keep reading for more details.

So, just what is a government student loan consolidation anyway? For starters, it is a type of loan which permits you to take several student loans, pay them off, and make monthly payments to a single lender. For example, if you have 3 outstanding loans with 3 different lenders that are due at 3 different times of the month, you may feel as if you are writing out checks just about every week. In fact, you probably are! Who needs that? You have enough to think about such as managing your hectic schedule; balancing work, family, friends, and the rest of life's tasks is enough for any one person to handle -- wouldn't it be simpler to pay a single payment each month? You bet it would!

Just where can you go to find yourself a government student loan consolidation? By searching online. Companies advertise their services to consumers and they are eager to do business with you. By shopping the internet you can locate the government student loan consolidation that is right for you. Please keep the following points in mind before selecting your loan:

Loan Rate. Will the loan be given to you at a fixed rate or at a variable rate? Can you lock in a long term fixed rate to make certain that your rate never rises?

Loan Amount. Exactly how much will the consolidator lend to you? Will the amount loaned cover the entire outstanding balance or will you have to pay the remaining funds off with a separate loan? Can you afford to do both?

Loan Term. How long will your loan take to be paid off? Will you be satisfied with making payments years after leaving college and with other responsibilities on your shoulders, i.e., new car loan, your marriage, a family, buying a home? Are there prepayment penalties if you decide to pay off your loan early?

Government student loan consolidations are fairly new and not for everyone. Make certain you understand all the "fine print" before agreeing to a new loan. You can reduce your debt to manageable levels with a government student loan consolidation if you shop wisely.

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Consolidate Student Loans - How it Works

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Consolidating student loans is simple: If you meet certain requirements and you have student loans, you can consolidate them into a single loan. What this means is that the lender you choose will pay off the current student loan amounts that you still owe, and will combine the different amounts that you owe into just one loan. When the lender does this, you will probably see your monthly payment on student loans drop. And that's just what you are looking for, an easier and more affordable way to pay down your student loans.

Both students with student loans, and parents who owe on PLUS loans that they took out for their students, can consolidate their loans. Consolidating student loans (as long as they are federal student loans) does not require that you have a credit check done to prove that you qualify. Is that surprising to you? Well it's true. Your credit score, no matter what it is, does not disqualify you from getting a federal student loan consolidation approved.

To start out, you'll need to know whether your loans are federal student loans or private student loans. Federal student loans have the backing of the federal government and are usually known as the Perkins Loan, Stafford Loan, PLUS (Parent Loan for Undergraduate Students) or loans from the Department of Education. There are also other kinds of federal student loans, so you'll need to look at your student loan report to check on what type of loan you have. A private student loan is a loan that you or your parents took out from a private lender, and loans like this are not backed by the federal government and do not qualify for federal student loan consolidations.

If you are falling behind in your payments on this type of loan, call the lender that you make payments to and ask whether you can consolidate your loans with them or negotiate lower monthly payments.

For consolidating student loans, you have to:

o Have at least $10,000 in student loan debt. This $10,000 must be all federal student loan debt, not a mixture of federal and private loans.

o Be in your grace period or repayment period. Your grace period is the time period after you take out a loan before your payments start. Your repayment period begins after your grace period ends. Your repayment period is when you make monthly payments on your loan(s).

o Not be in default status on any of your loans. Default status is when you have fallen several months behind in your payments and you have received a notice of default from the lender. If you are in default, don't be afraid to look for a consolidation loan anyway. A lender may be able to work out an agreement on how you can pay off the default and still consolidate your loans.

o Be a U.S. resident or permanent resident. Notice that citizenship is not a requirement, just residency.

o Not have consolidated the same loans before, or have gone back to school and accrued more loans to consolidate with the original consolidation

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