College Student Loan Consolidation Programs

You Are Here: Home » Student Loans » College Student Loan Consolidation Programs There are a number of reasons that graduates consider student loan consolidation programs â€" all of which are fully validated. This does not mean, however, that consolidation is always the answer. No matter what your reason for considering consolidation, you need to take the time to carefully consider your situation. You should also understand all of your options and how each one will impact your life today and twenty years from today since, in most cases, you will still be making loan payments. What is Consolidation? Loan consolidation means taking all of your loans and rolling them into one loan with one lender. Lenders do this by purchasing all of your old loans, often at a discounted rate. They then calculate how much they spent on all of your loans, add in any additional fees that they or your other institutions charged and your new interest rate. Since this is a completely new loan so you will be provided with new loan terms and conditions. Can You Consolidate? There are some restrictions on student loan consolidation, all of which you need to be aware of before looking for a consolidation loan. If you are consolidating for the first time, you can consolidate one or many loans. If you are considering reconsolidation, you must be able to add another loan to your current consolidation loan. You should also be aware that you cannot consolidate a loan that is in default. You will either have to catch up on your current payments or make satisfactory repayment agreements with the consolidation lender before you can consolidate your loans. Keep in mind that this also means continuing to pay your current loans on time until the consolidation process is completed. Failure to do so could result in a denial for your consolidation loan. Married couples are no longer able to consolidate their loans together but each person can consolidate their loans individually. This applies to parent loans and student loans as well. While both student and parent can each consolidate their loans individually, they cannot consolidate the loans together. To consolidate your loan, your loans must be active or in the grace period. You can no longer consolidate loans while you are still in school. If you consolidate your loan during the grace period, you are also likely to lose your grace period. This should be taken into consideration before applying for a consolidation loan while still in the grace period. Should You Consolidate? Now that you know whether or not you can consolidate, you should carefully consider whether or not you should consolidate. The two are not one in the same. While you may be able to consolidate your student loans, it is not always a good idea. One of the situations in which consolidation may not be a good idea is if you have a Perkins loan. Perkins loans have a lot of benefits for the borrower. If you consolidate your Perkins loan, you will lose those benefits. The loss of the benefits may end up being more destructive to your repayment period than the consolidation benefits. You also need to know that, by consolidating your loans, you are resetting the loan term. In most cases, this means more interest paid on the life of your loan. If you have already paid a good portion of your student loans, the consolidation of them may not be worth the extra interest expense. When Consolidating is a Good Idea Consolidating loans for students can often be a good idea, especially right after graduation when you are nearing the end of your grace period. By consolidating multiple loans into one loan, you can simplify your loan payments. You can also receive a lower monthly payment on your consolidated loan than you would have with each individual loan. This, too, can make your payments easier to manage. If you are struggling to make your monthly payments or are having a hard time keeping track of all of your loans but you did not recently graduate, consolidating might be a good idea as well. This can help you get back on track before you start experiencing the damage of defaulted loans. Another reason that may make consolidation a good idea is a significant life change like marriage or the birth of a child. Carefully consider if you will be able to make your loan payments as they currently are and, if it seems that you may not be able to, consolidating may be your best option. How to Approach Your Consolidation Because consolidating your loan means that your repayment schedule is started over, you will usually have to pay more interest over the life of your loan. For this reason, you should choose the shortest loan term possible. While this may seem like a bad choice because the monthly payment will be higher, it is actually a good choice because it means that you will pay less interest over the life of your loan. Also, shop around for your consolidation loan. Different lenders offer different benefits and loan terms. Since this is a long term commitment, you should approach it like you would a home or car purchase. Find the lender that fits your needs â€" both currently and in the future â€" the best.

Consolidating Payday Loans

  Payday loans can be helpful when you are in a pinch but you can quickly get in over your head. Outrageous interest rates and regular fees contribute to the problem and, before you know it, you have taken out more money, are paying more fees and may even end up taking out multiple payday loans to help you stay afloat. Despite your best efforts, you can feel the ship sinking. You are drowning in payday loan debt. You don’t know what to do and you keep hoping for a way out. Relax! There are a few solutions. How Creativity Can Help You Get Out of Debt Unfortunately, there aren’t any payday loan consolidation companies. There are, however, some options for consolidating your payday loans; you just have to be creative. Think outside the box and try to come up with a way to pay off the loans in a way that will help you get your finances and your budget back on track. Tapped out for ideas? Try a few of the following. Secured Consolidation Loans If you have enough debt and decent enough credit, you might be able to take out a secured consolidation loan. While this really isn’t an answer to your problem, a secured consolidation loan is more favorable than continuing to pay outlandish interest rates and payday loan fees. Be aware, however, that you will have to place your home up for collateral to obtain a secured consolidation loan. Make your payments on time and learn how to more effectively budget your money. You may even want to work on starting up a savings plan so that you can avoid payday loans in the future. Unsecured Personal Loans Another option is an unsecured personal loan through your bank or another financial institution. While the interest rates are generally higher for unsecured loans than for secured loans, the interest rate should still be significantly lower than the rates on your payday loans. Plus, you don’t have to worry about putting your home up for collateral. Of course, don’t mistake this advantage for a reason to make your payments late. Late payments will still have a negative impact on your credit score. The biggest disadvantage to unsecured personal loans is that you do have to have pretty good credit to get approved. In most cases, a score below 720 will be denied. You may not have a credit score this high, making it necessary for you to choose a different option for paying off your payday loan debt. Zero Interest or Low Interest Credit Cards Another option is to apply for a zero interest or low interest credit card and place all of your payday loans on the credit card. This will allow you to pay off your payday loans and make payments to your credit card company without all of the continuing interest. Keep in mind, however, that zero or low interest credit cards are only offering you an introductory rate. If you don’t pay off the balance before then, you are likely to be right back in the same situation. Make good choices and pay as much as you can afford on the balance before time runs out. Private Lenders Private lenders are a little known secret that so few people ever even think about. Private lenders loan money to people, just like you, for a variety of reasons. While you will have to meet their terms and conditions and you will have to pay an interest rate, the terms, conditions and rates are usually much more favorable than the payday loan terms, conditions and rates. You can find private lenders in a variety of places. Family and Friends Have a family member or friend with a decent amount of money or good credit? Try to employ their help. Many family members and friends are helpful when it comes to getting out of debt trouble. They care about you and don’t want to see you struggling. Just be sure to put everything in writing, ask for a receipt and make your payment on time. This will help prevent problems between you and the lender and keep your relationship from going sour. You should also consider paying your friend or family member an interest rate on the loan. This will give them an incentive to lend you the money and it will help them feel good about helping you get out of debt. Again, just be sure to get everything in writing and make sure that the interest rate you agree on is fair. There are so many other options when it comes to paying off your payday loans. Sit, ponder and think; come up with something creative or simply use one of the ideas above. Whatever you decide, use good financial planning and budgeting in the future so you can avoid getting into the same situation in the future.

Debt Consolidation Software

With so many Americans in debt, companies have started to come up with new and inventive ways to help. Debt consolidation software is one of their most recent developments. There are definitely a number of advantages to using this software but there are also a few disadvantages. Being aware of and understanding the pros and cons can help you determine if debt consolidation software is the best option for managing your debt problem. Consolidation Software Options â€" Not Created Equal As with any type of software, you will find that not all debt consolidation software options are created equal. Where some options are strong, others will be weak. Where some are user friendly, others are difficult to navigate. Where some may be effective at detecting ways that you can reduce your debt, others are very limited. Take the time to research the different software options. Find out what other users are saying. If you know someone that has used a debt consolidation software program to help them get their finances back on track, ask them what they used. Examine all the angles and compare with scrutiny. If you happen to choose the wrong program, you could end up suffering consequences. Consequences of Choosing the Wrong Debt Consolidation Software Some debt consolidation software programs are free to use. Others charge you a very nominal fee. So, even if you decide to use the wrong software for your needs or decide on a poor quality software program, you won’t lose a lot of money upfront. You might, however, be further behind on your bills due to defects in the software program. You could experience a longer time frame for paying off your debts because the software failed to notice some important and helpful debt relief options. As you might guess, this will cost you more money in the end so heed the warning and avoid choosing the very first program you come across. Free vs. Paid In almost every case, you will get more out of a paid debt consolidation software program than you will a free program. This is because free programs, while still somewhat useful, are often tied to a debt consolidation or debt settlement company. They want you to call them so the last thing they really want to do is help you get out of debt. If they gave you a program that worked a hundred percent of the time, you wouldn’t need their services. Paid programs aren’t always better though. Some are actually just as bad as the free ones. Look for reputable sources if you are going to be shelling out any money for your debt consolidation software. Do your research and make sure that the one you choose comes with a money-back-guaranteed, should you find out that it wasn’t really what you thought it would be. Understand the Advantages Obviously, if you find the right debt consolidation software, you can spend just a few hours working on a budget that will work for you or your family so that you can pay off your debts and get out of credit trouble. If you use the software wisely and stick to your new debt consolidation plan, you may even find that getting out of debt is easier than you thought. Of course, these advantages may not be received by everyone and disadvantages can sometimes outweigh the advantages. The Risk of the Unknown Very little is known about debt consolidation software because it is still so new. While there are a few important tidbits of information out there, the true potential of these programs won’t be recognized right away. More people need to use them, evaluate them and share their experiences before anyone really knows how they work or if they work at all. Not a Solution for Serious Credit Problems. Debt consolidation software is really a solution that is designed for individuals that have mild to moderate creditor issues. While they can serve as an effective means for handling small debt issues or devising a new debt management plan to help you get out of debt faster, they cannot perform miracles. If you have a serious debt problem and are facing potential bankruptcy, foreclosure or other potentially life-altering issues, it is best for you to contact a professional. Online Communities Some debt consolidation software programs offer an online community in conjunction with the debt consolidation software program. This too has both advantages and disadvantages. While it can help you formulate more ideas about getting out of debt faster or more effectively, in the online community, your identity can also be compromised, compounding your credit issue even further. If you have considered using debt consolidation software to help you get out of debt fast, you may want to keep looking. If, however, you want an option that can help you look at your loans and income more objectively so that you can develop a better debt-free plan, then a debt consolidation software program might be the best option for you.

What is a Debt Consolidation Loan?

There may be a number of reasons that you have thought about a debt consolidation. If you don’t understand their purpose or what they entail, you could end up making the wrong decision â€" a decision that could cost you thousands. Taking time to educate yourself, however, can help you make a well-informed decision. How Debt Consolidation Loans Work Applying for a debt consolidation means that you will be applying for a new loan. Your new lender will purchase your old loan or loans and offer you a new loan term and a new payment agreement. You will then have only one monthly payment with one lender instead of several loans with several lenders. Why People Choose Debt Consolidation Loans Having numerous loans can seem like a big hassle. There are a lot of different due dates to keep up with, different terms to consider. Most people choose debt consolidation loans because they seem like an easier method for handling their debts. This can be especially true if the individual is behind on their loans or feels like they can no longer manage all of their payments. Unfortunately, this assumption is not always true. The Truth About Debt Consolidation Loans Often your lender can purchase your old loans at a lower price. This is not always the case. Even if they are able to purchase it at a lower rate, you may have a higher interest rate. This can be especially true if you have had any late payments or new credit blemishes since you took out your original loans. You may even have early pay-off fees with your old lenders included in your loan with your new lender. So, while it may seem that debt consolidation loans will save you money, you usually end up paying the same amount and, in some very unfortunate cases, you may end up paying more. Another thing that isn’t always shared with individuals when they apply for a debt consolidation loan is that debt consolidation loans can actually damage your credit. Credit bureaus look at a variety of factors when determine your credit rating. When you close several accounts, it can have a negative impact on your credit in the short term and, in some cases, the long term. If you make your new payments on time, you can recover your credit score with time but always remember that credit score is actually based your ability to manage credit. When is a Debt Consolidation Loan a Good Idea? A debt consolidation loan is not a bad idea for everyone. There are some cases, like the potential of foreclosure or bankruptcy, in which debt consolidation is a better option. Carefully evaluating your situation and determining whether or not there is another way to manage your debt problems can sometimes help you avoid a poor credit decision like a debt consolidation loan. If, however, there are no other options, then a debt consolidation might be right for you. The Importance of Smart Shopping You should never accept a debt consolidation loan from the very first company you talk to. You should take the time to check with as many debt consolidation institutions as you possibly can. You can find debt consolidation options on the internet, at banks, through credit unions, specialized lenders and even credit card companies that will allow you to consolidate your credit card debts onto one card. Ask for an outline of the loan terms in writing. Look at all the aspects of the loan, like the interest rate, repayment period, total cost for the loan and the monthly payment for the loans. Also check the fine print for any clauses that may penalize you for paying off your new loan early, maintenance fees, administrative fees or any other fees that may not be directly disclosed to you. These extras can mean big bucks for you if you’re not careful. Paying Your New Loan Even though your debt consolidation loan can cause some damage to your credit score in the short term, it can help your credit score in the long run, especially if you make your payments on time. Do your best to keep your new loan with the same lender. This will also help your credit score in the long run. If you do not have any early loan payoff penalties, pay a little extra each month on your loan. This amount will help shorten the term of your loan and decrease the amount of interest you pay over the life of the loan. Even if the extra you can afford each month seems like a small amount, it can add up over time. If you should need a debt consolidation loan, look at it as a new start. Use this time to effectively manage your credit so that you can rebuild your credit score over time. When your credit score increases and you are eligible for new lines of credit, make sure that you don’t overextend yourself. This will prevent credit problems for you in the future.

Debt Consolidation Financing

There are many debt consolidation financing options â€" some of which you may not be aware of. All of them have advantages and disadvantages but all of them are better than the alternative â€" bankruptcy. If you are in a serious pinch with your credit and are considering bankruptcy, take the time to investigate and research all of your options so that you can decide which type of debt consolidation financing is best for you. Why Avoiding Bankruptcy is Important You hear how bad bankruptcy is all of the time but few people take the time to explain why. Understanding how bankruptcy can affect your future can help you understand the importance of finding an alternative, if at all possible. The first thing you should be aware of is that you must now qualify for bankruptcy. It isn’t as easy to file as it used to be, thanks to the Bankruptcy Reform Act that passed in 2005. Certain income guidelines must be met before you can file for Chapter 7 bankruptcy â€" the kind of bankruptcy that eliminates all of your debt. If you do not qualify, you can still file for Chapter 13 bankruptcy. In this sect, you still have to pay back a portion of your debts so, really, it’s no different than other debt consolidation financing options. Bankruptcy is also a long and tedious legal process. You must hire a lawyer, go to court and wait for the process to be completed before you have officially filed for bankruptcy. It is set up this way to try and encourage individuals to seek other debt relief options. Bankruptcy will also have long-term effects on your credit. While your bankruptcy is awaiting discharge, you may find it next to impossible to secure even the simplest of things, like an apartment. This is because, while you are awaiting discharge, you can add things to your bankruptcy. Creditors don’t like the idea of being claimed on a bankruptcy because then you are not obligated to make any future payments to them. Both Chapter 7 and Chapter 13 will also make it difficult for you to obtain lines of credit for an extended period of time. You may find it difficult to obtain things like cellular phones, credit cards and more. You may even have to pay huge deposits on utilities. Many of these items are necessary to daily life. As you can see, bankruptcy isn’t easy and it isn’t pretty. This is why there are so many different debt consolidation financing options available. Finding the one that will work for you does take time but it is well worth the effort. Debt Consolidation Loans Debt consolidation loans can be either secured or unsecured. Secured consolidation loans are usually one of your best options. This is because you have the lowest interest rate possible on your loan and all of your debts are paid off by your home lender. The disadvantage, however, is that you have to have good credit and you have to meet all other criteria like income to debt ratio and home equity requirements. If you fail to meet the criteria, you are ineligible for a secured debt consolidation loan. Unsecured debt consolidation loans are more difficult to get approved for. You also have a higher interest rate than you would on a secured debt consolidation loan. Your best option is to attempt a secured consolidation loan. Zero or Low Interest Rate Credit Cards Depending on the type of debt you have and the amount you owe, a zero interest or low interest credit card could help you get on a fast track to managing your debt more effectively. This, however, takes a lot of discipline. Since the low interest rate will only last for a short period of time, you will want to be certain that the entire balance is paid off before the introductory rate period is over. Otherwise, you could face hefty fees â€" fees that may be much more than your original fees with your original creditors. Consolidation Companies, Credit Counselors, Debt Management Programs One of the most recent developments in debt consolidation financing is the variety of debt relief companies that have surfaced. They all work a little differently and each has a set of advantages and disadvantages that you should be aware of â€" one of the biggest being illegitimate companies.  For many individuals, however, this is a better option than loans, credit cards or bankruptcy could ever hope to be. In most cases,  you learn how to more effectively handle your credit and your budget as you work on paying off your debts. Be aware that this option may also have some negative effects on your credit score. Debt help solutions like debt settlement can be the very worst on your credit and should only be considered in lieu of bankruptcy. No matter which option you choose to manage your debt, take the time to shop around. Investigate every possible angle. Compare each option to your current situation. This will help you make an informed and educated decision about your credit and financial future.

Bad Credit Consolidation Loan

  If you have bad credit and are in over your head in debt, you may be considering a bad credit consolidation loan. For most people with bad credit that are behind on their payments, this method of ‘catching up’ seems to be the most reasonable. There are, however, a few things you should know before jumping into a bad credit consolidation loan. The Dangers of Scams Because you have bad credit, many scammers assume that you also have bad judgment. Don’t prove them right! Protect yourself from scams by being able to recognize them. Know the common practices of legitimate credit lenders as well as illegitimate lenders. Don’t accept any company, especially companies online, at face value. Know Your Lending Options Whether you have good credit or bad credit, there are pros and cons to different lending options. Some options are not a wise credit choice â€" as you now know. Other options will help you get a handle on your credit payments and your bills. You should also know that, because you have bad credit, your lending options are more limited. The amount of limitations you face is contingent on the severity of your credit problems. You may find that the only options you have available to you are things like payday advances, which have extremely high interest rates, or secured loans, which put you at risk of losing something of value â€" like your home â€" if you fail to make your payments. Take the time to contemplate the pros and cons of each of your lending options. Understand what you have to lose besides a step towards good credit, should you default on your loan. Things like payday loans can come back on you as a bad check, which could be considered fraud. Cash advances are also very high in interest and you can quickly get in over your head if you’re not careful. In a secured loan, if you place your home up for collateral, you could lose your home if you fail to make your payments on time. This could put you at an even bigger risk than you are in now. If a secured loan is your only option, see if there are other ways to handle your current debt. Search for Non-Lending Options If you are really ready to get your credit back on track and can’t seem to find an option that seems reasonable or satisfactory, consider talking to a family member about helping you secure a lower interest rate and approval on a loan. If the size of your financial need is small, consider holding a yard sale or selling something in your home of value. Find ways around your debt problems without risking your credit. Contacting Your Creditors If you are behind on your payments and have been for quite some time, you might be able to find creditors that are willing to accept a smaller amount if you agree to pay the entire debt at once. This can hurt your credit score some in the short term but as long as you handle credit effectively in the future, it will eventually turn into something good because you did pay the debt â€" even if it wasn’t the full amount and you did pay it off, even if it wasn’t on time. This is still better than letting it just sit on your credit report for the next seven to ten years. Debt Settlement If you have a lot of debt and just don’t know how to approach it, then you could consider debt settlement. In this debt management option, the debt settlement company contacts your lenders and tries to convince them to take a smaller amount of money as payment in full. While this may seem like a great option, there are a lot of risks involved. Some debt settlement companies are less than honest. Others have taken money from people, just like you, leaving them in a worse state than when they started. Others fail to make the designated payments to your creditors on time. This only further damages your credit score. Be very careful when considering debt settlement. Debt Consolidation An actual debt consolidation loan, which may be difficult to come by with bad credit unless you have collateral, is where you secure a new lender for your debts. They purchase all of your debts and loans, roll them all into one loan and then offer you a new loan term. This may cost you more money. In rare cases, it can save you money. Either way, your old debts will all be paid. For this reason, a debt consolidation loan can help you get your credit back on track â€" if you manage it correctly. Becoming Debt Free No matter which option you chose for managing your debt and getting your credit back on track, you can be sure that it will take a great deal of time. You didn’t get into credit trouble overnight and you won’t get out that quickly either. Make your payments a priority. Take care of them promptly and learn how to handle your newfound credit when you do start to see improvements.