What does it mean to consolidate student loans?
Consolidation Loans combine several student or parent loans into one larger loan from a single lender. This loan is then used to pay off the balances on the other loans. It's a lot like getting a new mortgage. Most federal loans, like FFELP (Stafford, PLUS, and SLS), FISL, Perkins, Health Professional Student Loans, NSL, HEAL, Guaranteed Student Loans, and Direct loans, can be consolidated into one loan. Some lenders also offer private education loan consolidation loans. Consolidating school loans is one of the best and most important financial decisions that recent graduates and former students can make.
Why do most students choose to combine their loans?
- To bring down monthly payments by up to 45%
- To give them a chance to improve their credit score
- To make only one monthly payment on a student loan
The Facts About Discounts for Consolidating School Loans.
Why lenders give discounts on loans.
The Higher Education Act of 1965 says how much student loans can cost and how much interest they can have. This keeps student loan lenders from charging too much for loans, making it easier for people who need money to get student loans. But there's nothing stopping a lender from charging lower fees and interest rates. (Regulations against illegal inducements stop lenders from giving immediate rebates, which would be the same as paying borrowers back for their loans. But most lenders get around these rules by delaying rebate discounts by one month or by giving the discounts when the loan goes into repayment.
Lenders offer discounts on loans to stay competitive. At first, it was a race with the Direct Loan programme. But now that the single-holder rule has been thrown out, lenders are competing more and more for the very profitable student loan market. If you have more than one student loan, you should find out what you need to know about consolidating them.
For more information on http://www.schoolloaninfo.com, go to SchoolLoanInfo.com.
