Before the economy was under such strains, it was relatively easy to get a student loan consolidated. Federal loans could be consolidated using private lenders and there were innumerable companies that offered private student loan consolidation programs. Nowadays, federal loans are controlled solely by the government and private lenders have shied away from providing consolidation services for all other student loans. With all the changes that have occurred in the financial district, borrowers are often at a loss for what to do and where to go with their consolidation needs. Student loan consolidation advice is sometimes contradictory, but with enough perseverance and research borrowers can find the services that will best fit their needs.
Federal Student Loan Consolidation Information
As previously stated, until just a few years ago federal loans could be refinanced using a private lender. The government has recently put an end to this and now offers two different consolidation programs via the Higher Education Act (H.E.A.): the Federal Family Education Loan (F.F.E.L.) and the William D. Ford Federal Direct Loan (Direct Loans) programs.
The F.F.E.L program is often referred to as the federally guaranteed loan program for student and the monies are supplied by various financial institutions of which the borrower has his choice of lenders. The borrower doesn't have a choice of lenders in the Direct Loans program since its monies are supplied solely by the US Treasury via the US Department of Education.
Because of the Ensuring Continue Access to Student Loans Act of 2008 (E.C.A.S.L.A.), consolidating loans originated after October 1, 2007 is unprofitable to F.F.E.L lenders. This has prompted the F.F.E.L program lenders to stop offering consolidation services and forward these loans for student to the Direct Loans program's consolidation services.
Private Student Loan Consolidation Advice
Since government aid and federal loans don't cover all educational financial needs, students often resort to private loans to cover the additional costs. Upon graduation and while in repayment, the borrower should research consolidation services to improve his financial outlook. As a borrower with multiple student loans, one should look for a program that offers the following services:
1. Fixed Interest Rates - this lowers payments in the short-term but long-term effects include paying back a larger overall amount and paying over a longer period of time. This can be worth the effort though if the fixed rate is low enough and combined with other favorable incentives.
2. Relationship Discounts - most student loan consolidation companies also provide financing in other economic areas; having multiple accounts with the same lender often leads to discounts and incentives to keep the borrower loyal.
3. Payment Options - a good lender will offer deferment and forbearance possibilities in the event the borrower re-enters college or suffers from certain types of financial crises that will prevent him from repaying the loan. These options allow the borrower's account to remain in good standing while he sets his affairs in order. Also important to consider is interest-only payments; though these can be tricky to handle, this type of payment allows the interest to be paid off early so that only the principal remains after a certain number of years.
After taking a personal stock of your own loans, use this student loan consolidation advice to guide you through the troubled financial waters that have taken hold of the US economy. Keeping these tips in mind and searching for these incentives will ensure that any borrower's consolidation process is swift and painless.
Here are advice on what to look out for when doing your research about the lenders and reasons why you should take student loan consolidation advice visit Student Loan Refinance Rate.
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