Consolidating Student Loans

Consolidating student loans is rolling all of your loans into one loan. The rate of the loan is the weighed average of the specific loans that go into it and then it is rounded up to the nearest 8th of a percent. The consolidation is generally possibly only for loan balances of the amount of 7500 dollars or more and this depends on the individual financial lender. There are no fees for the consolidation.

For students that are presently in school you must ask your lender how to consolidate your student loans. In the past federal direct loans could only be consolidated if presently attending school but there has been a loophole, which was discovered by financial aid expert Mark Kantrowitxz, which showed that bank based Stafford loans can also be consolidated as well. In consolidating a loan that is bank based you must ask the financial lender to put the loan into a status of repayment. Most lenders will grant this request but if they don’t consolidation is not possible. After the request you must ask for a “in school referral” of repayment that means that after graduation you must pay the loan back. There is a drawback to doing this according to Kantrowitz in that the regular 6 month grace period is lost after you graduate. Consolidation is an advantage for practically all students presently in school because the low rate that you will be locked into can save more money than the worth of the grace period that is lost. The 2 percent reduction in the interest rate can save about 1100 dollars on a 10000 dollar loan. To consolidate a direct loan from the federal government just ask the government lending program.