 |
Student Loan Consolidation
Unlike private sector debt consolidation, Federal Student Loan Consolidation does not incur any fees for the borrower; private companies make money on the loan consolidation by reaping subsidies from the federal government. Debt consolidation is the process of combining several of your small debts into one large debt and one payment. On the surface, this may sound like a bad idea. But if done properly, consolidating your debts can provide fast relief from the suffocation and anxiety of being under a crushing mountain of debt. Debt consolidation usually results in one monthly payment that is much lower than the combined amount of all of your previous smaller debt payments. It's quite common for debt consolidation to reduce total monthly debt service by 50% or more. Student loan rates can fluctuate from the current low of 4.70% to a maximum of 8.25% for federal Stafford loans, 9% for PLUS loans. The current consolidation program allows students to consolidate once with a private lender, and reconsolidate again only with the Department of Education. Once the student has consolidated their loans, the loans are set to a fixed rate based on the year they consolidated; reconsolidating does not change that rate. If you default, it means you failed to make payments on your student loan consolidation according to the terms of your promissory note, the binding legal document you signed at the time you took out your loan. In other words, you failed to make your loan payments as scheduled. Your school, the financial institution that made or owns your loan, your loan guarantor, and the federal government all can take action to recover the money you owe.
Financial contracts are very confusing. Before signing yourself to a major long term commitment, have an attorney familiar with financing and taxes examine the documents and explain the details. A good tax finance attorney can save you many times his fee over the years, not to mention possible legal problems.  Whether buying a new car, or a used car, or selling a vehicle; first check KBB (Kelley Blue Book), Black Book, Red Book, or the NADA Used Vehicle Guide. For complete information on all your financial needs, turn from student loan consolidation to the Loan homepage.  Student Loan Consolidation. |
