Before You Apply For Or Consolidate Your Student Loan(s)

Student Loan Consolidation

As a student or the guardian of a student one of the most important relief you can receive is to conclude a Student Loan. But often the debt burden associated with student loans begins to way down on your income due to monthly repayments.

There are different student loans programs available, some of them out rightly exploitative. Student loan programs are either the Federal or the Private loans:

1. As the name implies, Federal loans are usually funded and administered through the Department of Education's Federal Student Aid programs.

2. Private loans are offered by Banks and other private organizations for the benefit of Private students. The two most popular private loan programs are the Citibank student loans and the Sallie Mae Signature student loans.

Most student loans, whether Federal or Private could be secured or unsecured, but the private loan institutions do charge higher interest rates than Federal loans.

You are at liberty to apply for either Federal or private loans along with scholarships for the purpose of defraying the cost of your education if you meet the requisite criteria.

As you must have already considered from the above, it is better to first apply for Federal loans and when time comes for consolidating your student loans also consolidate your Federal loan firstly, before consolidating a private student loans debt.

Below are the 3 reasons why:

1. Federal loans attract lower interest rate and slight changes could occur every July 1st to, in most cases, lengthen repayment period to upwards of 30 years.
2. You have just one institution to which you make repayments each month.
3. Eligibility criteria are usually more favourable with the Federal loans.

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Neshah writes for your Success. Recommended:Student Loan Consolidation Success, the road map to a successful college program without running into student loans debt

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