Consolidation Loans

When students have too much education debt, they are often looking for a way to lower interest on student loans and keep the same loan schedule. One option is to get a consolidation loan that has a low interest rate. The consolidation loan will average the interest you are paying on all of your loans put together. This lowers your overall interest rate. You can keep the same payback schedule, or you can receive more time on your consolidation loan.

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Repayment Options

One consideration you should make when shopping for the student loan for you is the repayment terms. Many loans, such as the Perkins and the PLUS loans, let you wait until you are done with your education to start making payments. This allows you to focus on your education while in school, and worry about repayment after you have earned your degree. This is an excellent feature!

The Stafford loan has many different repayment schedules, ranging from a ten year repayment to a twenty-five year repayment. Remember that the sooner you repay your loan, the less money in interest you will pay. If you can do it, the quicker payback is better. Private and consolidation loans are going to vary in their repayment periods, as they are offered by different companies and banks. Again, the sooner you can repay the loan, the less it will end up costing you.

How to Start the Loan Process

The first step in applying for student loans is to file a Free Application for Federal Student Aid. This form is designed to help the banks and other lenders determine your financial need. Even if you do not intend to take advantage of federal types of student loans, most private loans require this document, so fill it out as soon as possible.

Once this is done, you will receive a Student Aid Report. This document summarizes your FAFSA results. At this point, you can begin applying for aid. Remember to talk to your chosen school to find out about aid options you might not realize you are eligible for. The financial aid department at your school is going to be your lifeline in this process.

Finally, apply for the loans you are qualified for. Remember that there are several types of graduate student loans and undergraduate student loans, so explore your options. Even if you think you might not qualify, it costs nothing to apply, and with the many types of student loans, you just might find you do qualify for one after all!

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