Student Loan Consolidation Programs: How to Get the Best Deal
A student loan consolidation program can be an excellent choice when seeking affordable ways to repay college loans. But for an excellent deal, there are entitlements and discounts that should be secured.
When repaying college debts, it is not just a matter of interest rates that applicants should be looking at. Other aspects matter too, with the range of discounts that are available, and the structure and terms of the repayment schedule, playing a big part. When these aspects are combined, the benefits of a consolidation program can be even greater.
So, how can the best deal be secured? Well, there are some aspects that should be watched out for before repaying student loans with it can be deemed a wise move.
Extend The Loan Term
When it comes to repaying any kind of loan, the particular term of the loan is a key influence on the size of the monthly repayments to be made. It is the same with student loan consolidation programs, with some lenders offering incentives to agree to a long term, sometimes as long as 30 years.
For students emerging from college, the idea of repaying college debts over three decades might seem terrifying. There are even federal laws in existence designed to protect borrowers from exploitative lenders. But, if a borrower is prepared to freely agree to a longer term, then the lender often charges a lower interest rate.
It means both parties benefit. The student gets to lower their repayments to the minimum, while the lender still makes their profit, albeit over a longer length of time. But most importantly, the student loans are cleared and the consolidation loan is easily affordable.
Secure Available Discounts
Never underestimate the power of competition. Lenders are always looking to attract more lenders, and are willing to provide discounts on their student loan consolidation programs to borrowers who meet specific milestones. Those who make the most of these discounts can end up making much better savings.
For example, some lenders provide a small discount if the borrower agrees to an auto-debit repayment scheme. This means that repayments are made automatically from a bank account, thus ensuring repayments are not missed. There should also be an on-time discount for repaying college debts through a consolidation loan.
Also, it is important to note that, by law, lenders are not permitted to charge interest on a variable rate, only on a fixed interest rate. What this means is that, after the student loan is cleared, the borrower can easily keep consolidation loans within a tight budget.
Other Factors to Look Out For
Amongst the other factors to look out for is the provision of an early payment penalty. This is actually illegal. Borrowers cannot be punished for repaying their student loan consolidation programs early. So, if a lender suggests they will charge a fee, then know it is something they already know is unfair. They are clearly trying to take advantage.
Also, if the lender tells a borrower that any of the discounts mentioned above are special deals offered just for them, then this is also an untruth. Repaying college debts might be tough but the advantages of a consolidation program are not exclusive to any one lender. They are entitlements that everyone seeking to clear their student loans deserve.
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ABOUT THE AUTHOR
Devora Witts is a certified loan consultant who helps people get approved for Loans for People with Bad Credit and Bad Credit Mortgage Loans. To get aid with your financial situation you can visit her at http://www.badcreditloanservices.com