Consolidate Loan Spouse Student

Just finished school and now it’s time to start paying on those

Student loans fall into two categories.
1. A private student loan which was based on your credit or that of your parents. Loans of this nature may be consolidated through standard loan consolidation.
2. Federally funded student loans were backed by the federal government. You may have received them from a private institution but if you default on them the government guaranteed the funding organization that it would make the loan good. These loans have very strict rules regarding consolidation.

If you want to consolidate a student loan that was federally funded below are some tips for doing so.

A federally funded student loanwill not be discharged in a bankruptcy except in circumstances of extreme hardship. Hardship in this case may mean that you have no money left at all after paying for essential needs such as rent and food. Even people on disability and public assistance are often times found ineligible to have their loans discharged.

In certain situations for short periods after you have left school your student loan may be subject to forbearance. During this period of time you pay only the interest on the loan. Forbearance is generally allowed for a time period of thirty-six months. Applying for student loan forbearance is not an option if you have allowed you loan to go into collection.

A private student loan should not be and, in many cases, cannot be consolidated with a federally funded student loan. Once a private student loan is rolled in with a federally funded loan, it becomes subject to the same rules and restrictions as the federally funded loan. If you have both types of loans seek separate consolidation services. A federally funded student loan also cannot be consolidated with credit card debt.

If you are considering consolidation of your student loans, gathering the appropriate information and acting quickly is well advised. Grace periods apply to the ability to consolidate your student loan. Once the grace period has expired it is exceptionally difficult if not impossible to consolidate your loans.

The interest rate of the newly consolidated student loan will be a weighted average of all the loans which are within the consolidation package. Currently there is a cap of 8.25% on the new interest rate. However, in the current environment of escalating interest rates, this cap may be raised. The potential for a higher interest rate in the foreseeable future is another good reason to think about consolidating your student loans. Even though the interest rate on your new student loan may not be substantially lower than the interest rates on your current loans the period over which it is repaid may be extended thus lowering your payment.

A student loan can only be consolidated one time unless a newly funded loan is included in the second package. Therefore, it is extremely important to make sure you include all of your current federally funded loans in the first consolidation loan.

A student loan is a lifetime obligation if allowed to go into default. Failure to make payments is reported to credit agencies just like any other debt. So, before your student loan gets out of hand consider consolidating your studnet loan today.

5 Things to Know Before you Consolidate Your Student Loan

Student loan consolidation has great benefits, but it often looks like a complicated process and scares people. There is nothing to be afraid of, it is actually much simpler that you think, but to get the most of your consolidation loan you need to know several important things.

1. How to find the best student consolidation loan rate?

According to FFELP (Federal Family Education Loan Program) guideline lenders calculate your rate as an average of your existing loans' rates. They are not allowed to offer you a lower rate and compete for that. So there is really no point to searching for a lender with the lowest rate.

However, many lenders offer great rate reduction discounts. Usually you get a discount after making several payments on time or if you set an automatic payment from your bank account. When using online calculator, most lenders give you your rate after the discounts. So you will have to be careful and read all conditions of your new loan to make sure that you are eligible for the benefits.

2. How many times can I consolidate?

Usually you can only consolidate your loans once. That's why it is important to do your home work and select the right lender the first time. There are two circumstances when you can reconsolidate your loan. First, if you decide to study more and take additional loans. Second, if consolidating the first time not all your previous loans have been captured. This is theoretically possible, but in practice happens very rarely. Debt consolidating companies are usually pretty good about including all your outstanding loans in a new loan.

3. What repayment plan to choose?

Most companies offer at least two repayment plans - standard and graduate. They may be called differently by different lenders, but the general idea is the same. The standard plan is the most simple - your monthly payments are the same for the life of your loan. With this plan you usually pay the least amount of interest.

Graduate plan supposes that at first your monthly payment is lower; it can be low for 12 or 24 month. But your later payments are higher. This plan is perfect for graduates who are not sure of finding well paid work straight after graduation or if you expect other major expenses, like having a baby. By choosing a graduate plan you will pay more interest that on standard repayment plan, but the difference is usually not all that much.

There also might be other plans that allow you to make lower monthly payments, but you will have to pay off your loan longer. These plans are usually the most costly, because you end up paying much more interest.