What is Student Loan Consolidation?
Windowofworld.com – What is Student Loan Consolidation? Consolidation Loans combine several student or parent loans into one larger loan from one lender, which is then used to pay off the balance of other loans. This is very similar to a mortgage refinance.
Consolidation loans are available for most federal loans… including FFELP (Stafford, PLUS and SLS), FISL, Perkins, Health Professional Student Loans, NSL, HEAL, Secured Student Loans and Direct loans. Some lenders also offer private consolidation loans for private education loans. School Loan Consolidation is one of the most important and profitable financial decisions a recent graduate and former student can make.
Why Do Most Students Consolidate Their School Loans?
– To reduce the monthly payment amount by up to 45%
– Give them the opportunity to build their credit rating
– To make only one student loan payment per month
Info about School Loan Consolidation Discounts.
Why Lenders Offer Loan Discounts.
The Higher Education Act of 1965 establishes a maximum interest rate and fees for student loans. This helps protect loan outposts by student lenders, making access to student loans relatively easy for those who need financial assistance. However, nothing prevents lenders from charging lower interest rates and fees. (Illegal inducement regulations prevent lenders from providing direct rebates, which would be akin to paying borrowers for their loans. However, most lenders overcome this limitation by placing a one month delay in rebate discounts, or by providing a discount when the loan enters repayment.)
Lenders offer loan discounts for competitive reasons. Initially the competition was with the Direct Loan program. However, with the repeal of the single holder rule, lenders are increasingly competing with each other for the highly lucrative student loan market. If you currently have several student loans, you must get the right information about loan consolidation.