This article is meant to give you the information you need to feel confident that you understand the subject well. When you can't pay your student loans and don't know how you'll ever get out of debt, you might want to look into loan consolidation. It could be the solution to many of your problems.
Sallie Mae loan consolidation can help you pay off your federal student loans, improve your finances, and put a little extra money in your pocket every month. With a Sallie Mae loan consolidation, you can combine all of your student loans into one loan with a much lower interest rate, sometimes as low as 4.75 percent. A few percentage points can make a big difference in how much you pay each month. This can mean the difference between barely being able to pay your bills and having a little extra cash.
Borrowers often get fixed interest rates that are up to 0.6 percent lower than their current rates. Federal rules say that the interest rate on a consolidated loan given out on or after July 1, 1994 is the weighted average of the interest rates on the old school loans you are putting under the new one, rounded up to the nearest one-eighth of one percent. A consolidated loan can't have a fixed interest rate that is higher than 8.25 percent.
The interest rates on federal student loans can change every July 1 based on how short-term federal securities change over the course of the year. This can also affect your monthly payment. One advantage of a Sallie Mae loan consolidation is that the interest rate stays the same for the whole loan. Even though interest rates may be lower some years, if you lock in a rate, at least you know what your payments will be and they won't go up when interest rates do.
With a Sallie Mae loan consolidation, you can also extend the time you have to pay back the loan. The more time you have to pay it off, the less you'll have to pay each month. Don't forget, though, that if you make your loan last longer, you may have to pay back a bigger total amount.
There are no fees or credit checks when you apply for a Sallie Mae loan consolidation online. With just a few minutes of your time, you can lower your monthly payments and improve your credit score. When your Sallie Mae loan pays off your old student loans, your credit report will show that these debts have been paid off.
Things happen in life, and sometimes, student loan payments aren't made on time or at all during a crisis. If you have already used up your deferment and forbearance options on your current loans, consolidating them into one Sallie Mae loan may give you a fresh start and a clean slate. If you are in a situation where you might not be able to pay back one or more of your loans, taking advantage of a Sallie Mae loan consolidation now could save you a lot of trouble and help you get out of a tough situation.
If you decide that a Sallie Mae loan consolidation is what you want, there are four ways to pay back the loan: the Standard Repayment Plan, the Extended Repayment Plan, the Graduated Repayment Plan, and the Income-Contingent Repayment Plan.
The Standard Repayment Plan has fixed monthly payments, but the loan can only be paid back over a 10-year period. The Extended Repayment Plan also has fixed monthly payments, but they are spread out over 12 to 30 years, depending on how much money was borrowed, which makes the monthly payments smaller. The Graduated Repayment Plan also makes payments over 12 to 30 years, but every two years, the monthly payments go up.
The Income Contingent gives you a payment plan based on your annual gross income, the number of people in your family, and the total amount of consolidated loan debt. This plan gives you 25 years to pay it off. A Sallie Mae loan consolidation may be the best choice for you, but you should look into all of your options carefully to make sure you get the best loan for your situation. Now, if someone asks you about this topic again, you can smile and give them some good information.
