So you've worked your tail off for the last several years eating Ramen and pulling all nighters while living on your student loans that almost covered the bills, and now you've got a great job, a new life and a mountain of debt. Life next pop quizWhat do you do? Fortunately for today's education Loan borrowers there are plenty of options to help you get your new life started without having the old one hanging around your neck like an anchor. There are plenty of student loan consolidation options available for the savvy borrower, and one of them will probably fit your life.
Federal family education loan consolidation is probably the first place many borrowers will look. FFEL consolidation offers programs to consolidate both subsidized as well and unsubsidized loans. In some cases it is possible to get an FFEL consolidation loan even if you have been in default on your loans in the past. FFEL consolidation loans often offer fixed rates, and extended terms which help those just entering the workforce to lower their monthly payment.
Of course not everyone was fortunate enough (or thrifty enough) to have their federal loans cover all of their expenses while in school. People who needed Private loans aren't left out in the cold though. Many companies also offer consolidation packages that will let you put all of your private loans into a single payment. Private consolidation offers many of the same benefits as an FFEL consolidation, but be aware that FFEL and private loans cannot generally be consolidated into a single package. You may need to get two separate consolidation loans, one for your federal loans and another for the private ones.
Many parents use the PLUS loan program to borrow for the children's education. PLUS loans can be consolidated using a PLUS consolidation program much which offers similar benefits and potential pitfalls of FFEL and private consolidation - fixed rates, and lower payments spread over a longer term. Plus loan consolidations are great for some people but parents need to take a good look at all of their options before consolidating.
Another option to a traditional loan is an additional mortgage on a piece of real property like a house of land that you may own. Some students parents will take this option to pay off the loans and the student can they make payments directly to mom and dad. Private personal loans from family members are yet another possible way to get the worry of several large monthly payments off your back, and some businesses offer tuition reimbursement for their employees.
There are even options for those with less than stellar credit or who have maxed out traditional borrowing. Peer to Peer lending networks provide the same structure as the file sharing networks many people have grown up on, but this time, they deal with financing. Borrowers submit their loan request and groups of people bid on the loan offering a variety of interest rates and payment terms based on the project and the borrower's credit history. Once the details have been decided the final loan is serviced through the network which then disperses payments to the people who made the loan.
Making the transition from school life to your career is a road with more than its share of lessons and challenges. Having to make large student loan payments on an entry level salary while trying to save cash for a professional wardrobe, deposits on housing, and other "grown-up" essentials is enough to stop that progress dead in its tracks. There are many things to consider when applying for a consolidation, but knowing that you have options available can help make your transition manageable.
Federal family education loan consolidation is probably the first place many borrowers will look. FFEL consolidation offers programs to consolidate both subsidized as well and unsubsidized loans. In some cases it is possible to get an FFEL consolidation loan even if you have been in default on your loans in the past. FFEL consolidation loans often offer fixed rates, and extended terms which help those just entering the workforce to lower their monthly payment.
Of course not everyone was fortunate enough (or thrifty enough) to have their federal loans cover all of their expenses while in school. People who needed Private loans aren't left out in the cold though. Many companies also offer consolidation packages that will let you put all of your private loans into a single payment. Private consolidation offers many of the same benefits as an FFEL consolidation, but be aware that FFEL and private loans cannot generally be consolidated into a single package. You may need to get two separate consolidation loans, one for your federal loans and another for the private ones.
Many parents use the PLUS loan program to borrow for the children's education. PLUS loans can be consolidated using a PLUS consolidation program much which offers similar benefits and potential pitfalls of FFEL and private consolidation - fixed rates, and lower payments spread over a longer term. Plus loan consolidations are great for some people but parents need to take a good look at all of their options before consolidating.
Another option to a traditional loan is an additional mortgage on a piece of real property like a house of land that you may own. Some students parents will take this option to pay off the loans and the student can they make payments directly to mom and dad. Private personal loans from family members are yet another possible way to get the worry of several large monthly payments off your back, and some businesses offer tuition reimbursement for their employees.
There are even options for those with less than stellar credit or who have maxed out traditional borrowing. Peer to Peer lending networks provide the same structure as the file sharing networks many people have grown up on, but this time, they deal with financing. Borrowers submit their loan request and groups of people bid on the loan offering a variety of interest rates and payment terms based on the project and the borrower's credit history. Once the details have been decided the final loan is serviced through the network which then disperses payments to the people who made the loan.
Making the transition from school life to your career is a road with more than its share of lessons and challenges. Having to make large student loan payments on an entry level salary while trying to save cash for a professional wardrobe, deposits on housing, and other "grown-up" essentials is enough to stop that progress dead in its tracks. There are many things to consider when applying for a consolidation, but knowing that you have options available can help make your transition manageable.
About the Author:
Dennis Powel frequently writes about the consolidation of federal loans for non-students as well as student loan consolidation rules.
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