Student Consolidation Alternatives Available for students who are about to
graduate and may want to start thinking about Student Consolidation before the last minute. Student
Consolidation have a six month grace period after graduation before payments begin, but the consolidation
loan application process can take several weeks, especially if you haven't gathered all your loan
information and decided on a lender. It can take many weeks to get through the loan process, however when
it comes to repaying your loan the lender gives you six months after you graduate to start pay back your
student loan. Keep track of your student consolidation loans. Make a list of all your loans, including
type of loan, lender, the amount of your loans, interest rates and the amount of your payments. Analyze
your student consolidation loan documents, contact your lenders or loan servicers or go to the National
Student Loan Data System (NSLDS) website. Hopefully you never lose your pin number but if you do, you can
ask for a new one and they send it to you. Expect to wait a week or two for the PIN to arrive, so best to
get it done early.
Your Current Monthly Payments. If you are already in a repayment status, you will know your
exact monthly payments. However, if you are still in school or in your grace period, you should estimate your
monthly non-consolidated loan payment based on the current interest rates and your loan balance. If you’re
still going to school or still in your grace period, you can estimate your non-consolidated loan payment
using the balance and interest of your loan. You can also check your estimated payment amounts by contacting
your lenders or loan servicers. What's a Budget? Though many people wander through life from paycheck to
paycheck without knowing where their money is going, you really need to set up a budget to see if student
loan consolidation is for you. Once you have that first job, determine a reasonable amount of your income
that can be allocated to your student loan payments. This percentage should be based on a realistic budget.
Then see if the estimated loan payment amounts you calculated above will fit into our budget.
Sometimes you’ll find that your budget isn’t working out as planned, if that becomes the
case just go over it again until it makes good financial sense. What ways can you adjust your finances?
Weather its more money in or less money out. If it's a short term issue (expected raise in pay, getting a
part time job, etc.), consider your deferment or forbearance options. However, if there is no light at the
end of the tunnel, it is time to consider consolidating your student loans. A number of loans can be
consolidated in addition to Stafford and Private student loans are not eligible to be consolidated through
the Federal consolidation programs. You might lose some discharge or cancellation benefits or deferment
benefits if you include certain types of loans in your student consolidation loan like Federal Perkins Loans,
for example. You can contact the lenders of your loans to find out what the impact of consolidation will be
on your current benefits. If you want to consolidate your loans try going through the Federal Direct Loan
Consolidation Program. You can get the application online.
If you have graduated, but are still in the grace period, commence the student
consolidation process approximately two months before the end of the grace period. This will allocate enough
time to have your student consolidation loan processed before the grace period expires, yet not so early that
you lose too much of your grace period if you have a FFEL consolidation loan. (If you consolidate FFEL loans
during the grace period, you will give up whatever portion of your grace period remains. You get to keep all
of your grace period, even if you get a Direct Consolidation Loan.) Some FFEL lenders offer to hold off on
disbursement of consolidation loans until the end of the grace period to give borrowers opportunity to
minimize their interest rate and maximize their grace period. Check with your lender to be certain. Keep in
mind that if you can do a student consolidation during your grace period, you can lock in an interest rate at
least a half percent lower than the current repayment rate. Most banks will grant you a discounted rate if
you agree to sign up for auto- pay and make a certain number of consecutive on time payments, about 36 of
them. When filling out the consolidation application, make sure you provide all your complete and correct
addressand personal information, you may be asked to include two references, and sign the promissory note.
Neglect any of these and you will delay the processing of your application. If you are already in repayment,
continue making payments on your loans until your student consolidation application is approved. If you need
immediate payment relief you can always ask the lender for a deferment or forbearance until you are able to
start repayment or until your deferment time is up.
By Vernosha Anderson
Find Tons of Money
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