|
A
College
Consolidation Loan is a practical repayment tool that
bundles all your federal school loans into one loan, significantly
reducing your monthly payment
For
the good majority of those that have attended college, there are debts
to be paid off after you’ve graduated. Tuition costs continue
to rise and sometimes it takes more than one loan to pay for those
additional costs.
When
you’ve had your graduation ceremony, have or have not gotten
a job, and six months have gone by you will be expected to start paying
those loans back. A college consolidation
loan can make that repayment easier on you and your bank account.
There
are many companies and banks that offer a college consolidations loan.
These will take all loans that you have taken during your time in
college and combine them into one lump sum. That lump sum will be given
one interest rate that will often be less than the interest rate that
you’ll get from the loan repayment plan you’re
given when you’re close to graduation. You will be able to
make smaller payments and work toward the ultimate goal of paying off
your student loans.
As
you are looking for a college consolidation loan company, be fully
aware that there can be huge differences in how their program operates.
Be sure to compare costs and interest rates especially. Also be on the
lookout for those companies who charge a fee for early pre-payment of
the loan they give you, which only serves to lock in the interest that
they will be collecting from you on this loan.
Most
of the college consolidation loan companies will offer an
interest rate that is preferable to the one you are paying. If you have
more than one student loan, you are paying that interest rate more than
one time every month. When it comes right down to it you may end up
paying far more than the amount you borrowed if paid over a long period
of time.
Interest Rates and Payments.
A College Consolidation Loans
have longer terms than other loans. Debtors can choose terms of
10–30 years. Although the monthly repayments are lower, the
total amount paid over the term of the loan is higher than would be
paid with other loans. The fixed interest rate is calculated as the
weighted average of the interest rates of the loans being consolidated,
assigning relative weights according to the amounts borrowed, rounded
up to the nearest 0.125%, and capped at 8.25%. Some features of the
original consolidated loans, such as postgraduation grace periods and
special forgiveness circumstances, are not carried over into
the consolidation loan, and consolidation loans are not
universally suitable for all debtors.
College
Consolidation Loan Lenders.
Top
consolidation lenders ranked by total FY 2006 consolidation loan
originations.
| Lender
name |
#
of loans |
Amt
of loans ($) |
| Federal
Direct Student Loan Program |
1,169,110 |
$19,197,268,873 |
| Sallie
Mae |
866,295 |
$19,841,423,841 |
| Citibank |
232,126 |
$4,843,119,089 |
| Nelnet |
198,624 |
$4,796,065,812 |
| NextStudent |
89,284 |
$3,320,024,025 |
| JP
Morgan Chase |
115,777 |
$2,668,451,098 |
| Goal Financial, LLC |
111,426 |
$2,494,856,673 |
| College Loan Corporation |
75,360 |
$2,245,128,826 |
| AES/PHEAA |
166,730 |
$2,037,618,548 |
| Student Loan Xpress |
114,790 |
$1,880,997,383 |
| Wachovia
Education Finance |
80,174 |
$1,674,979,763 |
SOURCE:
Stafford (FFEL & Direct) and PLUS (FFEL & Direct)
Loans, from the National Student Loan Data System (NSLDS), US
Department of Education, Fiscal Year 2006.
|
