Student loan consolidation simplifies repayment.
Whether you are a recent high school graduate or an older adult seeking a college degree, student loans provide critical funds for tuition. Student loans have become so popular that the volume of U.S. student loan balances reached over $830 billion as of August 2010. While student loans make college degrees attainable, students later struggle with keeping track of several loans, with various interest rates and payment due dates. Student loan consolidation reduces the number of payments to one and, in some cases, reduces interest rates.
Instructions
1. Visit the Federal Student Aid website to ascertain whether you are eligible to apply for a consolidation loan. The website lists eligible student loan types and loan statuses that qualify: for example, loans that are in grace or repayment status. There is a temporary provision for in-school status loans that allows some borrowers to consolidate these types of loans if they apply before July 1, 2011.
2. Gather student loan information to compare original loan date, interest rate and monthly payments for eligible loans. Create a spreadsheet for loan information. Add monthly payments on all loans to determine the total you pay on student loans.
3. Estimate potential savings using a loan calculator, such as the one on Student Loan Consolidator.com. (See Resources.) Enter loan amounts in whole dollar amounts and interest rates with two decimal places for each loan that you want to consolidate, and press "Calculate my student loan savings." Compare the new payment to your current total monthly payments on all loans. Determine if the savings is great enough.
4. Collect information for an online application. At the Federal Student Aid website, choose "Borrower Services." Select "Get Organized" and "What do I need to fill out this application?" Review the items you need for the application, such as most recent monthly bills, coupon books and website addresses of current loan providers.
5. Apply online. From the Borrower Services page, choose "Apply online and e-sign your Promissory Note." Follow the steps and enter the necessary information, including loans you want to consolidate, the status of the loans and grace period end dates. The website instructs you to fill in your name, address and other personal identification information. Complete the remaining application steps, using "Continue" to move on to the next section. After you complete the application online, Federal Student Aid will contact you if they need more information or they will send you a letter informing you that the new consolidation loan is in place.
Tags: Federal Student, interest rates, monthly payments, Apply online, Borrower Services, consolidation loan, Federal Student website