College Loan Consolidation Programs: Finding the Right Program for Your Situation

The idea that all college loan consolidation programs are the same is deeply flawed. There is an array of program types and options, and perhaps even more importantly, a variety of lenders providing them. Finding the right program for your situation takes a little effort.For any student or graduate facing debts of tens of thousands of dollars, the future can seem quite bleak. This is where managing college debt effectively can make such a difference, and it is commonly accepted that the most viable method of doing this is consolidating the debt. But with both federal loans and private loans granted to students, consolidation is made a little more complicated.There is a wide range of consolidation programs to handle the constructive repayment of these college loans. But the right one depends on your situation and the nature of your existing loans.Consolidation ExplainedAs the name suggests, consolidation is all about gathering a number of debts together and buying them out with one single loan. The advantaged of this strategy is that one debt is a lot easier to manage than several. This is the basis of college loan consolidation programs.To students and graduates alike, budgets are effective ways to manage what little money they may have. And the fact that several debts are compressed into one means their efforts to balance the books are helped greatly. By managing college debt in such an effective way, the pressure is lifted from their shoulders.For example, a graduate may have spent four years in college, and have taken out five separate college loans to pay fees and cover some living expenses. Each of these loans have different interest rates and repayment schedules. But replacing these loans with one single loan is much more cost effective.Choosing the Right Consolidation ProgramTypically, a college loan consolidation program sees a group of loans brought together, and a new repayment schedule agreed. Usually, this entails agreeing a longer loan term so as to lower the actual monthly repayments. For example, instead of repaying $50,000 over 5 years, the term is extended to 10 years, thus reducing repayments from $850 to $420.Finding a program that reduces the repayments by such a degree is a core part of getting the right deal. However, the interest charged is also hugely important, with the extended term effectively meaning more interest is paid over the lifetime of the consolidation loan. Still, managing college debt in this way lifts the pressure.The other issue to consider is whether consolidation is for federal or private college loans. There are consolidation programs available for both categories, but not all of them allow for a mix of the two. So, in certain cases, some but not all loans can be consolidated.Where To GoSo, with all of these issues considered, where does a graduate go to get the right college loan consolidation program? Well, there are several options, but again it is sometimes dictated by the nature of your loans. For example, for federal loans it is best to approach the financial aid office on campus and apply for a federal consolidation loan. Here, applicants are advised which program to apply for. After all, managing college debt through consolidation is an option reserved for those in real financial difficulties.If your college loans are privately secured, however, then it is a good idea to approach your existing lender. They are often willing to strike a consolidation deal with their borrowers, and it saves students and graduates the trouble of applying.But there is always room for a better deal, and it is possible to track down some great options online. Just take care to consider the interest rates charged, and whether any real savings are made.