NextStudent Graduate PLUS Loans

All the benefits of a parent loan -- direct to the student

Get through graduate school with a NextStudent Federal Graduate PLUS Loan

Paying for your graduate school education now is within reach. NextStudent’s Graduate PLUS Loan makes it easy to attain your goals with a convenient and manageable program with rates starting as low as 8.5 percent! Aggressive rebates are also offered.

The Graduate PLUS Loan may be available to you no matter your income and completely pays for all your graduate school needs, including tuition, books and even your computer.

NextStudent’s Graduate PLUS Loan offers graduate students a variety of benefits and incentives, including:
3% Cash Rebate At Repayment: on the remaining principal balance after the first 12 months of consecutive on-time payments
2% Interest Rate Reduction: after first 48 months of consecutive on-time payments
.25% Interest Rate Reduction: for electing to use auto-debit for repayment
Generous Borrowing Limits: Borrow up to the entire cost of education (less any federal aid), including books, supplies, and even a computer!
Simple Application Process with E-Signature: Apply online and we’ll qualify your application within minutes. NextStudent also offers a “second look” for borrowers who receive an initial denial due to unresolved credit issues.
NextStudent’s PLUS Credit Resolution Team: 87% of the people who have applied for a Parent PLUS or Grad PLUS loan through NextStudent have been approved.
Flexibility: Graduate PLUS Loans offer several repayment options including
deferred repayment while you’re enrolled in school at least half-time, and
they’re eligible for consolidation. Also, there are no prepayment
penalties – ever.

*Borrowers must participate in ACH (Auto-Debit) program to qualify.

If you need money for Graduate School, NextStudent's GRAD PLUS Loan is the ideal choice. What are you waiting for?

Private versus Federal Consolidation Loans – What’s the Difference?

A consolidation loan lets you combine your federal student loans into a single loan with one monthly payment. There are two programs available for consolidating student loans:
The Federal Family Education Loan (FFEL) Program, through which banks, secondary markets, credit unions, and other lenders provide the consolidation loan
The William D. Ford Federal Direct Loan (Direct Loan) Program, through which the federal government provides the consolidation loan

There are several differences between these programs, as outlined in the table below:

FFEL Program

Lenders - Banks, secondary markets, and credit unions

Loans accepted - Can accept all eligible loans from eligible borrowers, but are not required.

Repayment Plans- Offers four repayment plans
Standard Repayment Plan
Graduated Repayment Plan
Extended Repayment Plan
Income - Sensitive

Repayment Plan (in which the monthly payment amount is set according to the borrower's income and loan debt)

Timing of consolidation

Borrowers can consolidate after they have left school and all of their loans are in grace or repayment.

Direct Loan Program

Lenders - Federal government

Loans accepted - Must accept all eligible loans from eligible borrowers

Repayment Plans - Offers four repayment plans
Standard Repayment Plan
Graduated Repayment Plan
Extended Repayment Plan
Income - Contingent Repayment Plan (in which the monthly payment amount is set according to the borrower's income, family size, and loan debt)

Timing of consolidation

Borrowers can consolidate while they are still in school.

In other ways, the two loan programs are similar:
They both have options to allow borrowers who have defaulted on their loans to consolidate those loans.
In general, neither of them charges prepayment penalties or origination fees, nor are credit checks or co-signers required. However, some private lenders may charge processing fees.
The base interest rate on your consolidation loan is the same regardless of the lender. However, private lenders may offer additional incentives such as a reduced rate if you make your payment on time and if you have your payment automatically debited from your bank account.

Keep in mind that if all of your loans are through one lender, that lender has the first option to consolidate the loans. Only if that lender declines can you go elsewhere.

This article is distributed by NextStudent. At NextStudent, we believe that getting an education is the best investment you can make, and we're dedicated to helping you pursue your education dreams by making college funding as easy as possible. We invite you to learn more about Private Consolidation Loans or Federal Consolidation Loans at http://www.NextStudent.com.

What You Need to Know About Debt Consolidation Loans UK

Should you find yourself over your head in debt, you might want to start looking into debt consolidation loans UK . These loans are designed for the person who needs help in taking care of their outstanding debt, keeping them from bankruptcy.

Much like conventional secured loans, debt consolidation loans UK are more or less marketed toward those with credit problems… enabling them to consolidate a portion (if not all) of their debts into a single lower monthly payment.

Debt consolidation loans UK tend to have a few advantages over conventional loans… they're usually easier for people with poor credit to get, they sometimes offer better rates than other loans that the person could apply for, and some debtors will even offer lower repayment rates to people who are consolidating their debt.

How debt consolidation loans UK work

Since debt consolidation loans UK are still loans, they need to be applied for at a bank or other lender. Some companies specialize in this type of loan almost exclusively, whereas others deal in these loans as well as more conventional home or auto loans. In most cases, you need to be able to show the various debts that you hold as well as statements of income, a stable residence, and collateral.

Once you've been approved for your loan, the actual consolidation can occur in several different ways. In some cases, the lender will process the payments for you (as is the case with some companies that specialize in debt consolidation loans UK .) In other cases, you'll be issued either a check or a line of credit and are responsible for making the debt payments yourself.

Either way, the money that you borrow is used to pay off some or all of your debt and instead of paying your outstanding debts you simply pay the money to repay the loan.

Debt consolidation loans UK are often secured loans

In most cases, debt consolidation loans UK are secured loans, meaning that they have some sort of collateral required as a security for the loan. Automobiles and real estate are most often used as collateral, though depending upon the lender precious metals or other valuables can sometimes be used.

Regardless of the collateral used, its purpose is to insure that the loan will be repaid… after all, if you don't repay the money that was lent to you, then the lender is able to take possession of your collateral and sell it in order to recover their lost money (often for considerably less than the value of the collateral.)

Keep in mind, however, that pretty much all lenders who offer debt consolidation loans UK would much rather you simply repay the loan than have to sell off your collateral.

After all, they get off a lot cheaper and with a lot less time involved if they don't have to hire someone to take possession, then find a seller, and process the sale… because of this, many lenders are willing to work with you to help you catch up should you fall behind on your payments.

Securing Debt Consolidation Secured Loans

If you're like most people, then you've got debt in your life… and if that debt is getting out of hand, you might want to consider debt consolidation secured loans.

These loans are designed for people who find themselves in debt beyond their means to reasonably pay it back; the loans pay off either a portion or the total sum of their debts so that there is only a low monthly loan payment instead of the various debts that were consolidated.

Being a type of secured loan, collateral of some kind is required so that the loans can be extended even to those people who have had credit problems in the past.

Debt consolidation secured loans are useful in avoiding bankruptcy as well as simply getting a person's life back on track.

Determining the best collateral

Collateral is some property of value that is used to guarantee that a lender will get their money back, either by repayment or by repossessing and selling the collateral property.

In debt consolidation secured loans, it is used to guarantee that the lender will be repaid even though the person borrowing the money may have had credit problems in the past; because of this, specific types of collateral are preferred over others. Real estate and vehicles such as cars and trucks are the most common collateral for debt consolidation secured loans, in no small part because of the ease with which a lender can determine the value and find a market for them.

The collateral with the highest value should be used to guarantee the debt consolidation secured loans, since a greater value in comparison to the loan amount can help you to get lower interest rates and better loan terms… meaning that you may end up paying less than you would if you used collateral with a lower value to guarantee your debt consolidation secured loans.

Shopping for the best deal

Like most things, the rates that you are offered for debt consolidation secured loans may vary from lender to lender.

You should get quotes from several different lenders on the same loan amount and collateral, not dedicating yourself to any particular debt consolidation secured loans until you've had a chance to fully explore your options.

Check with locally-owned banks and finance companies first, as they are sometimes more flexible with their rates, and take time to carefully compare all of the quotes that you receive for debt consolidation secured loans. After you've determined which lender has the best offer, go back to them and complete your application.

Make sure that you repay your loan on time (or early, if possible)… not only can it improve your credit score, but it can also help establish good business relationships that can help you to get better rates in the future.

Finding the Consolidation Loans that You Need

Consolidation loans can be very useful in a number of circumstances… they can be used to consolidate multiple loans at a single institution, to eliminate debts and combine them into a single monthly payment, and even refinance old loans into a single loan with a lower interest rate.

Different types of consolidation loans exist for people with a variety of different credit ratings, and are exceedingly useful in credit repair and avoiding bankruptcy.

If you're shopping for consolidation loans then the process can seem confusing at times… there are several terms associated with these loans that can leave you scratching your head if you're not familiar with them.

Secured, or unsecured?

In the world of consolidation loans, security has nothing to do with making sure that the money isn't stolen. In this instance, “security” refers to whether or not some property of value (known as “collateral”) has been used to guarantee repayment of the loan.

If the loan is secured, then the value of the collateral (which is most often a vehicle such as an automobile or truck, or a piece of real estate such as a house) is used as a basis for the loan.

Consolidation loans that are secured enable the lender to legally take possession of the collateral and sell it off to get their money back if the borrower doesn't repay the loan.

Lenders don't like to possess property in this manner, as it costs them both time and money, but they'll do it if all other attempts to collect on the loan fail.

Unsecured loans, on the other hand, don't require any sort of collateral as a guarantee. There aren't many consolidation loans that are unsecured, and the ones that are usually either combine loans held at a single bank or are for relatively small amounts.

These loans have higher interest rates than their secured counterparts, but don't carry the possibility of having the collateral repossessed and sold (since there isn't any collateral to repossess or sell.)

So what are interest rates, anyway?

The way that banks and other lenders make money off of consolidation loans is by charging interest, or an additional amount that's added onto the borrowed amount at regular intervals.

Interest rates are expressed as a percentage, and that percentage of the remaining amount of the loan is added to the loan every month (or however often the interest is compounded, or calculated.)

The interest rates of consolidation loans can vary depending upon rates set by the government, bank or finance company promotions, the value of the collateral offered (for secured loans), and the credit history of the borrower. Ideally, you want the interest rate to be as low as possible… this means that you'll have less to pay back than you would with a higher interest rate.

Getting the Most Out of Consolidation Loans UK

Before letting too much debt or too many payments get the better of you, consider applying for consolidation loans UK .

If you're wondering what they are, consolidation loans UK are loans that are designed to “consolidate” debts of various kinds… paying them off with the amount of the loan, leaving the one loan payment in the place of the multiple payments you were having to make before.

The end result is fewer debts hanging over your head, fewer cheques to write, and an easier time keeping your all of your finances under control.

A variety of options exist for consolidation loans UK… secured loans, unsecured loans, and a variety of interest rates and terms.

Some consolidation loans UK are designed for people who have debts beyond their ability to reasonably repay, and others were created so that people with multiple loans with the same bank or finance company (perhaps an automotive loan, a boat loan, and a personal loan) can combine their loans and refinance them at a lower interest rate.

A matter of collateral

The difference between secured and unsecured consolidation loans UK is collateral, or property that has some value which is used to guarantee or provide security for a loan.

A secured loan is one in which collateral is provided, with the collateral acting as a guarantee that the lender will get their money back no matter what happens. When the loan is taken out, a lien (which is a legal claim to the property) is placed on the property… once the loan is repaid, the lien is removed.

Should the borrower fail to repay the loan, then the lender can exercise their legal right and take possession of the property in order to sell it and get their money back.

This repossession can be expensive for the lender, however, so most banks and finance companies would much rather receive the money for their consolidation loans UK from the borrowers than from selling repossessed property.

Unsecured loans are those consolidation loans UK that do not require collateral to guarantee the loan. These are much less common than the secured loans, and almost always have higher interest rates.

The increased interest rates are due to the increased risk of these loans… without the collateral as security, there is no guarantee that the lender will get their money back should the borrower default (or not pay) on their loan obligation.

These types of consolidation loans UK are usually only offered to borrowers who are consolidating multiple loans with a single lender or to those who have exceptionally good credit.

The risk of unsecured loans is often too great to allow them to be granted to people with poor or bad credit.

A Beginner's Guide to Low Interest Debt Consolidation Loans

Looking for low interest debt consolidation loans can sometimes seem like looking for gold at the end of the rainbow, but loans with minimal interest can be had even by people with poor credit ratings.

The most important things in trying to find low interest debt consolidation loans are to know how to use your collateral correctly and to know the best places to shop. Don't be in a hurry to find a loan and miss out on a lower interest rate by simply taking the first offer that comes your way… shop around at different banks and lenders until you find the best loan for your money.

First you need to figure out the entire amount of debt that you want to consolidate, and also the lowest amount that you can get by on… while it would be nice to reduce all of your debt to a single monthly payment, you might have to pick and choose if your debt level is too high and your collateral value can't cover it.

Once you've determined about how much you're looking for, then it's time to head out and try to get one of the low interest debt consolidation loans.

Collateral matters

In order to get the best of the low interest debt consolidation loans, you're going to need good collateral. The most common collateral is automobiles and real estate, and with good reason… these types of property almost always have high values and are easily recognizable as sellable property by lenders if things should have to come to that.

Use the collateral object that has the highest value, and try to borrow less than that amount. The lower the amount you ask for in relation to the value of your collateral, the better chance you have of getting one of the low interest debt consolidation loans that lenders offer.

Finding the right lender

Different lenders can offer different kinds of low interest debt consolidation loans. Your best bet for finding a good rate comes from going to small local banks or finance companies… both of these are more likely to offer low interest debt consolidation loans that some of the larger chains of banks and lenders that get enough business that they don't need to offer you as low of an interest rate.

Try to go during a promotion that the bank or finance company is holding; they tend to offer special rates during promotions that you can take advantage of. If there aren't any promotions to be had, go anyway… even if they can't give you one of their low interest debt consolidation loans, they may be able to direct you to other lenders you should try.

Get quotes from several before deciding on the one for you, and get the best deal that you can.

Information About Debt Consolidation Loans with Bad Credit

Finding debt consolidation loans with bad credit can be quite a task… after all, a lot of lenders don't want to take a risk on someone who is such an obvious credit risk.

Luckily, however, a lot of lenders will take that risk; it's simply a matter of knowing what they're looking for, and how best to approach them for a loan.

Asking around to see which banks and lending companies offer debt consolidation loans with bad credit is a good start, and from there it's simply a matter of presenting yourself in the best possible light in order to improve your chances of getting the money that you need.

Debt consolidation at a glance

Before applying for debt consolidation loans with bad credit, it helps to know exactly what debt consolidation is.

Basically, consolidating your debt means that you're getting a loan that will be applied toward your outstanding debts… either paying them off completely, or paying off a portion of the debt to make the rest more manageable. This leaves you with the loan payment as either your only payment to make or at least one of a few payments to make, and making it easier for you to repay fewer debts than when you had the larger amount.

Debt consolidation loans with bad credit are almost always secured loans, meaning that you've got collateral (such as a car or real estate) on the line to ensure that you repay what you've borrowed.

Getting the most from your loan

To get the best value and lowest interest rate when trying to get debt consolidation loans with bad credit, it's best to use your most valuable property as your collateral and ask for considerably less than its total value. This insures that the lender will get their money back one way or another, and usually makes them much more willing to issue debt consolidation loans with bad credit.

Paying off as much of your debt as you can before applying is a good idea, too… it shows that you're serious about getting out of debt, and are making a legitimate effort. If it looks like you really want to fix your debt and credit problems, then you're more likely to be eligible for lower interest rates and better terms for debt consolidation loans with bad credit.

Shopping around for the best value

Even though you're applying for debt consolidation loans with bad credit, it doesn't mean that you have to accept the first offer that comes your way.

Shop around with several lenders and compare their rates, seeing what terms one lender offers and whether other banks or finance companies can offer you something comparable. This will help you to get the most out of your money, and ensure that you have less to repay.

Tracking Down Cheap Debt Consolidation Loans

In the modern world of expensive living and high interest rates, it might seem nearly impossible to find cheap debt consolidation loans. If you're one of the people who desperately need one of these loans then there's a good chance that you have less-than-wonderful credit… meaning that you've probably already accepted the seemingly-inevitable fate of paying high interest rates for any loan that you get.

There are cheap debt consolidation loans available, though, even if your credit is poor; you just have to know where to look, and what to offer in exchange.

Finding the right lenders

The first thing that you need to do when looking for cheap debt consolidation loans is find potential lenders. Internet searches can yield a variety of different “debt consolidation” specialists who will be able to offer loans at very reasonable rates.

Of course, to get these cheap debt consolidation loans you're going to need to offer some security in exchange… and that's where collateral comes into play.

The right collateral for your loan

In order to get the lowest interest rates and have access to cheap debt consolidation loans, you're going to need collateral. Collateral is some form of property that is offered as security for a loan, and that can be repossessed and sold by the lender if the loan is not repaid.

Technically collateral can be any property with value, but in most cases it falls into one of three categories: vehicles, real estate, and precious metals or collectibles. When applying for cheap debt consolidation loans, it's best to ignore the last category… automobiles and real estate offer a much easier way to determine the value of the collateral, and are generally easier for the bank or other lender to sell in case things come to that.

Select the collateral item that has the highest value, and get quotes of interest rates and terms from several lenders using it at each one.

Compare and save

Once you have several different quotes for cheap debt consolidation loans, sit down and compare the interest rates and other terms associated with each of them.

Some of the loans will obviously have better rates and terms than others, and since they are all based on the same collateral property it should be relatively easy to compare them to find the best deal for your money. Whichever lender you choose should be repaid as quickly as you can,

in case you should find yourself needing cheap debt consolidation loans again sometime in the future… after all, they'll likely remember you from this time and be more willing to offer you good rates if they have a positive experience to relate to.

UK Credit Card and Debt Consolidation Loans

Your current situation.

You have got several credit and store cards and several loans. You are finding it difficult to make the payments each month. Generally you do make the required payments but this means that other parts of your like are suffering. You’ve got no spare cash for the occasional night out or weekend away. Even making the minimum payments each month means that the outstanding amounts are never reducing.

The equity in your house.

If you have owned your house for several years there is a chance that you have something called equity. This is the difference in the current value of the house and the total amount of the outstanding mortgage. So if you have an outstanding mortgage of £80,000 and your house is now valued at £170,000 you have got equity of £90,000. There are certain companies that will lend you money based on this equity. They are safe and secure in the knowledge that if you default on your payments that they can get their money back by selling your house. That’s the small print “Your home is at risk if you do not keep up payments…”

You can use this new loan to pay off all your current credit cards and loans and have a reduced monthly payment. This method of using the equity in your house is called loan consolidation.

Current loans and credit cards

Lets says that the total amount outstanding on you credit cards, store cards and loans is £20,000. If the equity on your house is £90,000 you should have no problem getting a second mortgage of £20,000. However you will still need to be in employment and prove that you can make the monthly payments.

Documentation.

Before you apply for a second mortgage with the intention of paying off your existing debts you should get all your paperwork together. This will save you time and make the loan process much quicker. Here is a list of the documentation that you will need. Different loan companies will ask for different things so just get all the documents together ready for whatever they want.

Last three months payslips.
Last three months bank statements.
Council Tax bills.
Electricity bills.
Gas bills.
Water bills.
Marriage certificate.
Passport.
Driving licence.

Not all those documents are essential but it will slow the process down if you don’t have them available.

You’ll also need full details of the credit cards, store cards and loans that you want to pay off. This includes the name of the companies, the account numbers and the outstanding amounts.

The new company will actually issue with individual cheques that you send to these companies, you don’t actually get a cash payment to yourself.

Caution

Let’s say that your loan application has now been processed, you have paid off all those outstanding debts. The weight has been lifted off your shoulders. You now need to be very careful. If you run up any more debts at this point in your life then you will be in deep trouble.

Make sure you cut up and return all but one of your credit cards. You need to keep one so that you can use it for purchasing things on the internet and making hotel reservations etc. Maintaining one credit card will ensure that you keep a good credit history. Do not apply for any new credit cards or loans.

Your monthly payments on the new loan will be significantly lower than the total of your previous credit card payments. But, you need to take advantage of this situation, it is no use spending the extra money on useless luxury goods. You have to use this opportunity to stabilise your financial life. I suggest that you save at least half of the extra money that you now have each month. This will give you the chance to build up a buffer in case you suddenly find yourself unemployed.

If you need some help in deciding to be disciplined just consider what your life will be like if your home is repossessed.

The bad news

Although your monthly payments are now lower, the reason for this is that you will be paying the loan off over a much longer period. This is how the loan companies make their money. And because you are paying the loan off over a much longer period you will also be paying a lot more than the value of the actual loan. For this reason it is vitally important that you discuss all possibilities with your Independent Financial Advisor.

Summary

Getting a debt consolidation loan can relive you of a lot of stress and worry. But this comes with a long term financial penalty. It is thus vitally important that you don’t run up any more debt. Work at paying off that loan as quickly as possible and regaining your financial freedom. For more information visit: www.ukmortgagewithbadcredit.com

Low Interest Debt Consolidation Loans - Getting A Low Rate

Low interest debt consolidation loans can help you pay off your debt sooner. For the lowest rates use your home equity to secure a loan. You can also find personal loans that will reduce your interest payments. Otherwise, transfer your credit balance to a new credit card account that offers 0% interest on transfers.

Home Equity Loans

Home equity loans offer low interest rates because they are secured with your property, reducing the chances of you defaulting. You can opt to cash out your equity by refinancing or applying for a second mortgage or line of credit.

Refinancing can cost thousands in upfront fees, buy they can offer you overall lower payments. Second mortgages and lines of credit usually cost zero to a couple of hundred of dollars to open, but their rates are higher than a traditional mortgage.

Personal Loans

Personal loans offered through banks and other financial lenders can also help you consolidate debt. These types of loans are based on your credit score and cash assets. Since these are unsecured loans, rates are higher. However, when compared to credit card rates, they are significantly lower.

Credit Card Transfers

You can also open a credit card to take advantage of 0% or low interest rates on transfer balances. These types of offers are introductory, so expect rates to jump in six to twelve months. In the meantime, you can start paying down debt while rates are low. At the end of the introductory period, you can open another account or look for a long term loan with low rates.

While transfers are attractive, they do carry risks. You should read the terms to be aware of any fees charged for transfers. Also, guard against racking up more debt by closing old accounts. This will also help your credit score in the long term.

Shopping Loan Rates

No matter what type of loan you choose to use to consolidate your debt, be sure to research rates. By comparing offers, you can save thousands in interest charges. Most lenders post their rates online for easy access. Be sure to read their terms as well to make sure you don’t get caught on fees.

Poor Credit Debt Consolidation Loans

Poor credit debt consolidation loans are an excellent option to consider if you are an individual who wouldn't qualify for a traditional loan, but are in need of money to pay off bills, consolidate debt into one lower payment, and improve your style of living.

Understanding the exact meaning of a poor credit debt consolidation loan is extremely important. Poor credit debt consolidation loans are meant with individuals that have low credit report scores, as rated by Experian.com, Transunion.com, and Equifax.com These three credit bureaus are where lenders turn to prior to offering a loan to a business or individual. Lenders obtain an individual's credit scores to determine if the person is worthy of the loan. Scores listed through the three credit bureaus are configured and calculated using software by the Fair Isaac Company, and are called FICO scores. The FICO scores range between 300, for no credit, and 850, for perfect credit.

Virtually no one has perfect credit scores at 850, because scores are based on a number of factors, including debt to income ratio and late payments, to name a few. However, scores of less than 619 are considered poor credit, and scores below 550 make it virtually impossible to obtain a loan except in certain instances where a lender specializes in poor credit debt consolidation loans and is looking for such borrowers. In general, though, scores below 619 are considered poor credit, and the borrower is considered a high risk to the lender.

Having poor credit is difficult, and it's not ideal by any means, but it also doesn't have to be something that lasts forever. Credit scores need not rule out the options a loan can offer. Relief can come with obtaining a poor credit debt consolidation loan. While it does take time, credit scores can definitely be repaired after obtaining a poor credit debt consolidation loan.

When conventional loans are out of the picture due to low credit scores, a poor credit debt consolidation loan can offer a way out of having poor credit, and a way of repairing credit scores and creating a better lifestyle. Poor credit debt consolidation loans can come at a time when the borrower needs money the most - when payments are high, or when income levels aren't high enough to pay all of the bills. They are available to even those that are self-employed or have been involved in a bankruptcy more than ten years ago. Additionally, a poor credit debt consolidation loan offers a "light at the end of the tunnel" for repaying debt faster, as well as consolidating all bills into one smaller monthly payment. By making these payments on time, credit scores can jump as much as 100 points or more in one year.

Pros of Poor Credit Debt Consolidation Loans

1. Poor credit debt consolidation loans put money into the hands of an individual who wouldn't otherwise qualify for a loan.

2. These types of loans give borrowers a chance to consolidate their debts and gain control over their financial state, as well as an opportunity to invest in a home or automobile if needed.

3. Poor credit debt consolidation loans allow individuals to borrow money without giving a reason, and therefore, can be used for any purpose, including a college education or a business.

4. A poor credit debt consolidation can allow the borrower a way to improve their credit rating, provided that all payments are made on time.

5. There is an emotional and psychological impact involved with poor credit debt consolidation loans. It gives individuals an opportunity to turn their life around and improve it when they previously felt that it was hopeless. Poor credit debt consolidation loans can also help individuals stay out of bankruptcy.

Cons of Poor Credit Debt Consolidation Loans

1. The money goes into the hands of an individual with a history of poor spending habits. If the money is used in a wasteful manner, or to "splurge" on a high ticket item, for example, the loan will only add to the current financial burden if it is not used efficiently and wisely. An additional loan used for these purposes can lead to bankruptcy and financial destruction.

2. If payments are consistently late after obtaining a poor credit debt consolidation loan, credit scores will drop even more.

3. Interest rates are much higher on poor credit debt consolidation loans than for conventional loans. However, if the loan is used wisely, it can be refinanced at a lower interest rate once credit scores increase.

4. Poor credit debt consolidation loans that involve collateral may mean that if the money is not used wisely, ownership of the collateral may be at stake. The lender has the right to take the collateral if payments are not made on time or not made at all.

After obtaining a poor credit debt consolidation loan, and the debts have been paid, get your finances in order. Balance your checkbook to the penny, and don't make any unnecessary purchases. Don't make extravagant purchases, either. Remember, the reason for obtaining the poor credit debt consolidation loan was to get back on track. Don't employ poor spending habits that can make credit scores end up even lower. Stay away from high interest credit cards, credit cards that can't be paid off monthly, and especially, payday loans. If a large purchase is needed, such as furniture or a vehicle, look into used items. Furniture can be purchased at thrift shops and through newspaper classified ads. Join your local Freecycle group (freecycle.com) to obtain items for free that you might otherwise consider purchasing. Shop for vehicles through private owners, not at car dealerships. Privately owned vehicles will offer a lower cost to you without any added costs. Have a trusted mechanic check the vehicle over before you pay for it, though.

Debt Consolidation Loans – How to Locate the Best Deal

According to an old Indian proverb, the best way to cut iron is through iron itself. Therefore, in dealing with debts (the principal component of which is personal loans), the best manner will be to use debt consolidation loans (which too are personal loans). Debt consolidation loans are among the most popular options available to residents of the UK to eliminate their debt load.

Ease in getting personal loans has largely influenced the spending habits of people. Instead of spending only up to the limits of their income, more and more people are using loans to purchase items of comfort and luxury. The habit has attained mind-boggling proportions, such that more and more people have been found with some or other credit deformities. The number of people in debts has also increased.

Debt consolidation loans, though personal loans, are different from the other loans that constitute ones debts. The primary objective of debt consolidation loans is to solve the debt problem. Therefore, debt consolidation loans have been designed thus. Personal loans earlier taken by borrowers may have been taken at higher rate of interest. In debt consolidation loans, one of the primary features is low interest rate or APR. Debtors must always try to arrange debt consolidation loans at a typical APR.

There is no shortage of debt consolidation loan providers in the UK. Nevertheless, ones chances of getting a good deal in debt consolidation loan are few; mostly when one goes all alone in the search of loan assistance. The stakes are high when using debt consolidation loans. A good deal can settle all your debts. However, if one is not able to secure a good deal, he is not able to settle all his debts. Moreover, he adds further to the debt load in the form of debt consolidation loan and its interest.

Brokers can significantly help debtors in their endeavour. Brokers are linked both to debtors as well as to loan providing banks and financial institutions. They are associated with debtors in the sense that they are endowed with the responsibility of finding proper deals. Brokers are associated with loan providers through an agreement, by which banks and financial institutions advance loans to their customers in exchange of a commission to broker.

Broker thus acts as a missing link between loan providers and borrowers. Once, borrowers get their desired deal through a loan provider, the role of broker ends.

Allowing brokers to find debt consolidation loans will be advantageous for borrowers on two grounds. Firstly, borrowers’ main area of specialization is the one in which they are employed. The field of loans is new to them, or they are not much conversant with it. Consequently, they cannot find deals with as much precision or professionalism. Secondly, loan providers respond much promptly and amicably to brokers than to borrowers, particularly when borrower has bad credit history. Borrowers with bad credit history too are able to secure good deals in debt consolidation loans at the reputation of the broker. However, in case of brokers too, borrowers need to contact only reputable lenders.

The beginning is the half of every action. Therefore, if you are able to locate a good deal in debt consolidation loans, you are almost up to your desired goal of freedom from debts.

When a debt consolidation loan provider receives the application for loan, it verifies and then approves and sanctions the loan proceeds. Borrowers can get maximum help through lender in the settlement of debts. The lender may assign a debt expert to assist debtor. The first thing that borrower needs to do is to total all his debts. The aggregate of debts serves as the measure for total amount of loan. Loan amounts in the range of £5000 to £50000 can be raised quite easily.

When debts are totaled and a sum equal to the debts has been raised, borrowers can get to the task of eliminating debts. Debt experts, equipped with their experience and excellent negotiation skills, can eliminate debts easily.

Debt consolidation loans are offered for a certain period, usually between 5 to 25 years. Borrowers will thus have to pay the loan amount along with the interest within the said time period. For the purposes of convenience, it will necessary that borrower discuss several repayment options with the lender and stick to whichever method chosen for repayment.

Debt Consolidation Loans - Why You Must Consider Debt Consolidation Loans

When you are swimming in a sea of debt, debt consolidation loans can come to your rescue. If you are maxed out on all your credit cards and store cards and are at the brink of bankruptcy, debt consolidation loan is what can save you. Debt consolidation loans are regarded to be a better option compared to any other lines of credit.

Here are some of the advantages of debt consolidation loans

A> Single payment to make: Yes, you heard it right. Rather than pay out multiple payments to many lenders, the debt consolidation loan is the only single loan payment you need to make each month. This can simplify your finances.

B> Interest rates - Most of the debt consolidation loans are loans against your home equity and the interest rates are way lower compared to credit card or personal loans.

C> Monthly payments - When the interest rates go low, so do your monthly obligations. Most consumers notice at least a couple of hundred dollar difference in their payments.

D> Single creditor - You now have only a single creditor to deal with. When you have a problem, you can pick up the phone and talk to that single person rather than having to contact various lenders. It frees up your time.

E> Tax deductions - The interest you pay on your debt consolidation loan can be taken as a deduction on your tax forms submitted to the tax man.

Debt consolidation loans have several advantages. However, they do have disadvantages as well. Hop over to our website, Ameri debt counseling to learn more about the disadvantages and little known secrets of debt consolidation loans. Visit us at http://www.americreditservices.com/.

Debt Consolidation With Unsecured Personal Loans

Everyone knows how quickly monthly credit payments can add up. Between credit cards, auto loans and medical bills, it can be very overwhelming. Add high interest rates to the equation and it can be virtually impossible to get out from under the burden of all that debt. It truly is a vicious cycle – a cycle that enriches the profits of many creditors. Take, for instance, a credit card with a £5000 balance that carries a 22% interest rate and has a minimum payment of £130. At this rate, it will take seven years to pay off the credit card at a cost of about £10,000. That’s twice the principal balance on the credit card! Add one or two more credit cards, an auto loan and a hospital bill and it’s no wonder that consumers are becoming prisoners to their creditors.

Many people today have found a way to manage their debt through unsecured personal loans. This type of debt consolidation is really geared toward those who do not meet the normal lending criteria, meaning those with lower credit scores and/or those considered “sub prime” – or high risk – by traditional lenders. Many things can contribute to a less than desirable credit rating, the worst, obviously, being things like bankruptcy and foreclosure. More commonly however, credit scores are tarnished by late payments and an unfavorable debt-to-income ratio. Unfortunately, once the damage is done – and it can be done rather quickly – it can take years to repair. What’s a person to do in the meantime?

In the past, there was not much that a person could do except wait until enough time passed and all the blemishes were erased off. Creditors viewed those with low credit scores as abusers of the credit system. When so many consumers today are living paycheck to paycheck, it is virtually impossible to not have some kind of derogatory mark on your credit report. A 30-day late payment can lower a credit score by 30 - 75 points. Imagine what a month or two of unemployment can do to a credit score. In a matter of weeks, someone with great credit can fall into the abyss of the “sub prime” - a hole from which it will take years to emerge. However, a new trend is developing as many lenders have found that a low credit score does not equate to a deadbeat, non-paying borrower. In fact, many lenders are specializing in working with those with problem credit to help them get back on track.

There are several companies out there who specialize in making unsecured personal loans to individuals with sub prime lending criteria. Most will grant loans for amounts as little as £250 and as much as £25,000. Loans are available with same-day approval and no upfront fees. To ensure a loan company is reputable, be sure to look for one that is regulated and registered as a finance broker. Borrowers may also want to look for a lender that offers comprehensive insurance in case of an illness or unemployment.

An unsecured personal loan helps a person’s financial position by consolidating all debt into one manageable monthly payment. Instead of writing, for example, five different checks to five different creditors, the five accounts are consolidated into one with a single lender; therefore, only one check is issued. Most often, the interest rate on the personal loan is lower than that on the credit cards and the single monthly payment is generally less than the sum of the five individual payments. Homeowners would generally use a home equity line of credit to accomplish this, but since an unsecured personal loan requires no collateral, it is ideal for UK Council Tenants, Housing Association Tenants, Private Tenants, MOD Tenants. In fact, individuals with any residential status can take advantage of this type of credit.

While approximately half of these types of loans fall into the “debt consolidation” category, about 20% are requests for new car loans. Borrowers are also looking to fund such things as holidays, weddings, even cosmetic surgery. The loans offer an opportunity for someone to splurge on something that is important to him or her.

It is important to borrow only as much money as you can afford to repay. That’s why it’s a good idea to do an income and expenditure exercise before applying. Income should always outweigh expenses and money for savings and emergencies should be included in that budget. It is also important to remember non-regular expenditures such as gifts, vacations, entertainment and clothing. If it turns out that there is more money going out than coming in each month, debt consolidation can still help, but it may be necessary to give up some of the non-necessities. To assist with preparing a budget, The Office of Fair Trade website offers a free budget tool. The site also provides information about credit, finance, and loans. It prompts certain questions to ensure that the consumer has shopped around for the best deal and that he or she is making a wise financial decision.

An unsecured personal loan can mean different things to different people. Whether it’s used for debt consolidation or otherwise, here are some of the benefits:

• Lower monthly payments
• Pay off debt more quickly
• Increased monthly disposable income
• Rebuild credit
• Enjoy that dream vacation, car, body, stereo system, etc.

Choosing a lender can be tricky. Borrowers should look for a company that:

• Is regulated
• Is registered as a financial broker
• Charges no fees – upfront or otherwise
• Offers insurance policies to cover illnesses or unemployment

When done correctly, debt consolidation with unsecured personal loans can mean a better financial position for many.

Amalgamate Your Debts!!! Personal Bad Debt Consolidation Loans

Consolidation of your debts

Most of the people these days are having more than one debt with them. These debts can be combination of loans, unpaid credit cards bills, electricity or gas or other utility bills and other forms of credit. Repaying all this debt is a difficult task full of trouble and hefty calculations while maintaining your budget. Consolidation of debts can help you out here by reducing all your monthly debt payments. This can be done through the help of a personal bad debt consolidation loans.

Personal bad debt consolidation loans

Personal bad debt consolidation loans are the perfect partner for an individual facing trouble in repaying his debts and need respite in form of consolidating his debts. With the help of a personal bad debt consolidation loan amount you can repay all your debts at once. The benefit here is that you will only have to make a single monthly repayment which will easily fit into your pocket at low interest rates.

Form of personal bad debt consolidation loans

If you are a homeowner or having any asset offer as collateral to the lender, you can easily get a secured personal bad debt consolidation loan, else an unsecured loan will suit you with slightly higher rates but faster approvals.

Bad debt or bad credit holders

Personal bad debt consolidation loans are specially meant for the people with a bad credit score i.e. CCJ’s and IVA’s, defaulters and arrears etc. These loans helps them recover from there bad credit simultaneously clearing their debts.

Things you need to ask the lender for while selecting a personal bad debt consolidation loan

1. What fees will apply to the loan?
2. What is the interest rate on the loan?
3. What are the payments on the loan?
4. Will the loan adversely affect my credit rating?

Search to apply

You can get the free quotes for personal bad debt consolidation loans through online website. You can compare these quotes and select the best one among them. The best here means a loan quote which not only suits your requirements but also is easy to handle while making repayments. Afterwards you can fill an online application for with personal details, loan amount, residential status and other requisite details.

After debt consolidation through personal bad debt consolidation loans

Once you get the hold of your debts through a personal bad debt consolidation loan, you should take measures to avoid further debts and manage loan repayments easily. You can take the help of credit counseling, debt management programs or debt management plans etc to stop the debts from arising further and letting you enjoy a stress-less life.

Lead A Debt Free Student Life, Obtain Debt Consolidation Loans

A prompt and timely repayment always keeps you away from falling into a debt trap. But at the time of financial crisis it becomes quite difficult to make all repayments viable especially if you have taken several debts. To overcome this situation a debt consolidation loan would be the best answer for you.

Too many debts always create a problem with your repayments. Debt consolidation loans help you to repay all your existing debts by consolidating them into one. To be more clear, consider this example. Suppose if you have 3 existing debts. Now when you take a debt consolidation loan, you will make repayment for only this loan. All your previous debts will be merged together and will be repaid automatically by the debt consolidation lender. This will help reduce the size of your repayment and you will be bound with only one creditor.

Student debt consolidation loans also offer several benefits. They come with a very low rate of interest and are charged only after you have completed your school and college. There are plenty of rebates also available that you can avail with student debt consolidation loans, Apart from that if you go for this loan, your debt pressure will decrease a lot and you will be able to concentrate on your studies and work.

You will get a student debt consolidation loan mainly from two sources:

• A government agency- These are federal loans offered usually with cheaper interest rate than other sources.

• A federal agency- also known as private student debt consolidation, offer loan to all students who fail to get a government fund.

Student debt consolidation loans are offered to all types of students. As a student, this might be your first loan that you need to repay your tuition fee, boarding fee, travel expense etc. So, you will be offered with a no credit history loan. You will get a student debt consolidation loan also if you have a bad credit history.

The process of student debt consolidation application is as simple as filling any other form. The most ideal and affordable source of application is the internet to which every student is familiar. Internet provides a range of lenders offering student debt consolidation loans. The application form will ask you for certain details about your identity and credit history. Being a student your loan application will be approved quickly without any delay.

But before filling out any form, first research and find the lender offering best loan amount with the lowest interest rates and easy repayments. This way you will get the best deal that will make your financial status good.

Get Rid of those Bills – Credit Card Debt Consolidation Loans

A credit card acts as temporary money for you. It allows you to make spending when you are short of cash or if you are uncomfortable in carrying too much cash in your pocket. But it is not free……you get the bill at the end of every month for the value of all the spending you had done during the month through the credit card. And you are required to pay these credit card bills on time as banks and financial institutions are very strict regarding these payments. A little delay and be ready to pay the charges for the penalty and fine. This is the story of a single piece of plastic known as credit card. The situation become worst, when you are carry too many of them. So, when these credit card debts become unmanageable, you can take the help of credit card debt consolidation loans.

Credit card debt management loans helps you pay all the existing debts for credit cards which you are carrying. These loans are easily available in the loan market with large number of lenders. Also, in order to attract borrowers, lenders are continuously reducing the interest rates on these loans. So, a research among these loan lenders through online option can be beneficial for you in choosing a loan lender for credit card debt consolidation loans. You can apply for the credit card debt consolidation loans with or without offering the collateral to the lender.

There are various steps which you can take along with going for a Credit Card debt consolidation loans to get back the control over your credit card bills. These include attending credit counseling, planning a budget according to your income, close your credit card accounts which you don’t use, making cash purchases wherever possible, using debit cards, transfer your balance to the credit card with lowest interest rate. All this steps will make the loan more effective. This will also give you the freedom from the stress and anxiety which you may be facing due to threatening calls and legal letter from your creditors to repay the credit card debt.

While filling an application form for a credit card debt consolidation loan through online option you need to fill simple details about your personal information, residential and employment status, loan amount required and an idea of your credit score. The lender once convinced will call you back for further assistance.

Credit card debt consolidation loans considers homeowners, non-homeowners, employed and self-employed, people with bad credit etc. So you don’t have to worry about your status to apply for a credit card debt consolidation loan, which can serve you with a debt free life.

Bad Credit Debt Consolidation Loans – Way to a Debt Free Life

You have a pile-up of debts and now you need to get rid of it. A crisis is awaiting you in case the debts remain the same for a longer period. Though debt consolidation loan is a perfect remedy for eliminating the debts but your bad credit may pose a hurdle in taking the loan. Well change that mindset as there is an especially designed bad credit debt consolidation loan that gives access to the much needed loan without making bad credit an issue.

Bad credit debt consolidation loan is provided for consolidating all your previous debts under one new lender. Now instead of paying monthly installments to different lenders, you pay the installments to only the new lender who provided you bad credit debt consolidation loan. The purpose of taking the loan is to eliminate all those debts which were of higher interest rate. So bad credit debt consolidation loan has to be taken at lower interest rate as compared to the higher rate of interest being paid on previous loans. This means that lender will essentially give you the loan for debt consolidation at lower interest rate despite your bad credit. How does he do that?

Bad credit debt consolidation loan is made available in secured and unsecured options. The secured option can be availed by offering collateral like home to the lender. On securing the loan, the lender provides the loan at lower interest rate without bothering about bad credit of the loan seeker. In case of payment default the lender can recover the loaned amount by selling borrower’s property. The secured loan is offered for larger repayment duration ranging from 5 to 30 years. Any greater loan can easily be paid back in the duration.

If you do not want to risk property for a loan or simply because you do not own a property, still you can take unsecured bad credit debt consolidation loan. Prepare a convincing repayment plan and take it to the lender along with proof of your repayment capacity and the loan is given to you. Show the lender your annual income and overall financial standing to convince him. Tell him clearly as to why you failed in timely payments of previous loans. Remember it all depends on how far you can go in convincing the lender that unsecured bad credit debt consolidation loan will be paid off in time. The unsecured loan however comes at slight higher interest rate and for a shorter repayment period and the loan amount on offer may also be smaller.

Bad credit happens when you repeatedly default in making payments and therefore face CCJs or filed for bankruptcy. As a consequence on FICO credit score range of 300 to 850 your credit score is below 600 to be labeled as bad credit.

Before settling for a lender, better compare different lenders who specialize in offering bad credit debt consolidation loan. See who has lower interest rate that you are looking for. Apply online to the lender for a fast approval of the loan.

Bad credit debt consolidation loan will not only pay off your all previous debts instantly but the loan goes a long way in improving your bad credit score also. So make sure that the loan installments are paid off in time.

What Is The Consolidation Process?

When a borrower consolidates loans in the Direct Consolidation Loan Program, the U.S. Department of Education (Department) pays off the original Federal education loans and originates a new loan for the total amount of the loan(s) consolidated. Here's how that works:

Step 1: Application Review

We review the borrower's application and enter it into our system. If there is missing or incorrect information, we attempt to contact the borrower directly and/or send a letter identifying the needed information. If a borrower applied for the loan by phone or through the web, the Loan Consolidation Department sends a promissory note to be signed and returned by the borrower. The borrower has 14 days to provide the information to us or the application is cancelled.



Step 2: Loan Verification

We request verification of the information on the borrower's application to determine each loan's eligibility for consolidation and its payoff balance. Currently, we electronically verify Direct Loans, defaulted loans held by the Department, loans serviced by loan holders enrolled in our Electronic Verification Certification (EVC) service, and loans held by Sallie Mae. For all other loans, we send a verification certificate to each loan holder to obtain the required information. Loan holders have ten business days to complete the verification certificate and return it to us.



Step 3: Income Contingent Repayment Processing

A borrower who must use the Income Contingent Repayment (ICR) Plan due to a defaulted loan OR who selects the ICR plan as a matter of choice must submit an "ICR Consent to Disclosure of Tax Information" form. This form, which verifies income information, is forwarded to the IRS for approval. If the waiver is denied, we request additional information from the borrower.



Step 4: Loan Statement Sent to Borrowers

A loan statement summary package is mailed to the borrower and payments are mailed to the lenders simultaneously after his or her loans are verified.



Step 5: Payment to Loan Holders

If a loan is not in default, we send the loan pay-off to the loan holder or credit the borrower's Direct Loan account. If a loan is in default, the Department’s Default Resolution Group or the Guarantee Agency will receive an electronic payment manifest, SF-1081, for the principal and interest, and a check for the collection costs. Participants in EFT (Electronic Funds Transfer) receive these payments electronically.

When a loan holder receives a payment from the Consolidation Department, the loan holder(s) is required by regulation to fully discharge the debt upon receipt of proceeds and notify the borrower that the loan(s) has been paid in full, even if we underpay the loan.

Any payment a borrower makes to the previous loan holder(s) after the loan(s) is paid off is forwarded to us as an overpayment. These payments are applied to the consolidation loan balance. If our payment does not satisfy the borrower's account balance, the loan holder is prohibited from billing the borrower and must notify us of the underpaid amount. We work with the loan holder(s) to resolve any underpayment or overpayment issues. (See "How do I request an underpayment or return an overpayment?" or "What are the Tolerances for Under and Over Payments?")



Step 6: Account Set-Up

Borrowers' Direct Consolidation Loan accounts are set up when their loans are paid off. Once account set up is complete, borrowers receive important information about their loan status and payment due dates. Normally, their first payment is due within 60 days of the disbursement of the Direct Consolidation Loan.

NOTE: Borrowers are required to continue making payments with their current loan holder(s) until they receive written notification that their loan(s) has been successfully consolidated.



Step 7: Adding Loans to an Existing Direct Consolidation Loan

Borrowers have 180 days after the first disbursement of their consolidation loan to add a loan(s) to the consolidation by completing the Request to Add a Loan to an Existing Federal Direct Consolidation Loan [PDF Format (28K)] form. After 180 days, the borrower must complete a new application.

Private Student Loan Consolidation

Private student loans cannot, in general, be consolidated with federal student loans. The low interest rates on federal consolidation loans are not available to private education loans. Nevertheless, there are several options for refinancing private education loans.

Since most private education loans do not compete on price, a private consolidation loans is merely replacing one or more private education loans with another. So the main benefit of such a consolidation is obtaining a single monthly payment. Also, since the consolidation resets the term of the loan, this may reduce the monthly payment (at a cost, of course, of increasing the total interest paid over the lifetime of the loan).

Home Equity Loans

Private education loans tend to have interest rates that are in the same ballpark as home equity loans. If your private education loan has a variable interest rate, you might consider using a fixed rate home equity loan to pay off the private education loan, effectively locking in the interest rate.

Education Lenders

The following education lenders will consolidate private education loans. These are private consolidation programs, so the interest rates are dictated by the lender, not the government. There may be additional fees charged for originating these loans.

You should not consolidate your federal student loans together with your private education loans. They should be consolidated separately, as the federal consolidation loans offer superior benefits and lower interest rates for consolidating federal student loans.

When evaluating a private consolidation loan, ask whether the interest rate is fixed or variable, whether there are any fees, and whether there are prepayment penalties.

Private Student Loans

 
Private student loan volume is growing much more rapidly than federal student loan volume. If current trends continue, annual private education loan volume will surpass federal student loan volume within a decade. Accordingly, it is important that students have tools they can use to compare different private student loans.

This page provides a basic comparison chart that highlights the key characteristics of the major private education loans. There is a separate list of private consolidation loans that can be used to consolidate private education loans.


Best Private Student Loans

As a general rule, students should only consider obtaining a private education loan if they have maxed out the Federal Stafford Loan. They should also file the Free Application for Federal Student Aid (FAFSA), which may qualify them for grants, work-study and other forms of student aid. Undergraduate students should also compare costs with the Federal PLUS Loan, as the PLUS loan is usually much less expensive.

The fees charged by some lenders can significantly increase the cost of the loan. A loan with a relatively low interest rate but high fees can ultimately cost more than a loan with a somewhat higher interest rate and no fees. (The lenders that do not charge fees often roll the difference into the interest rate.) A good rule of thumb is that 3% in fees is about the same as a 1% higher interest rate.

Be wary of comparing loans with different repayment terms according to APR, as a longer loan term reduces the APR despite increasing the total amount of interest paid. FinAid's Loan Analyzer Calculator may be used to generate an apples-to-apples comparison of different loan programs.

The best private student loans will have interest rates of LIBOR + 2.8% or PRIME + 0% with no fees. Such loans will be competitive with the Federal PLUS Loan. Unfortunately, these rates often will be available only to borrowers with great credit who also have a creditworthy cosigner. It is unclear how many borrowers qualify for the best rates.

It is not uncommon for lenders to advertise a lower rate for the in-school and grace period, with a higher rate in effect when the loan enters repayment.

Private Student Loan Comparison Chart

The following table provides information about the annual and cumulative loan limits, interest rates, fees, and loan term for the most popular private student loan programs. Often the interest rates, fees and loan limits depend on the credit history of the borrower and co-signer, if any, and on loan options chosen by the borrower such as in-school deferment and repayment schedule. Loan term often depends on the total amount of debt.

Most lenders that require school certification (approval) will cap the annual loan amount at cost of education less aid received (COA-Aid). They may also have an annual dollar limit as well.

Lenders rarely give complete details of the terms of the private student loan until after the student submits an application, in part because this helps prevent comparisons based on cost. For example, many lenders will only advertise the lowest interest rate they charge (for good credit borrowers). Borrowers with bad credit can expect interest rates that are as much as 6% higher, loan fees that are as much as 9% higher, and loan limits that are two-thirds lower than the advertised figures.

The information presented in this table is based on lender literature and a survey of rates charged to actual students. Actual rates and fees may be higher.

Consolidation Loan Discounts

Many lenders offer loan discounts to encourage borrowers to obtain their education loans from them. This section of FinAid discusses these discounts, their history, their benefits, and several caveats. It also includes comparison charts that list the loan discounts offered by the most popular education lenders.


Why Lenders Offer Loan Discounts


The Higher Education Act of 1965 sets the maximum interest rates and fees on student loans. Nothing, however, prevents a lender from charging lower interest rates and fees. (The illegal inducements regulations prevent lenders from providing immediate rebates, which would be akin to paying borrowers for their loans. However, most lenders work around these restrictions by instituting a one month delay in rebate-style discounts, or by providing the discounts when the loan enters repayment or at other milestones.)

Lenders offer loan discounts for competitive reasons. Originally 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 profitable student loan market.

Since the repeal of the single holder rule on June 15, 2006 allows borrowers to consolidate their loans with any lender, the originating lenders face a risk of losing their borrowers to other lenders. They are responding by offering better discounts on unconsolidated Stafford and PLUS loans, by instituting discounts that depend on longevity with the lender (e.g., rate reductions and principal reductions after so many months into repayment and waivers of the last six monthly loan payments), and by requiring certain discounts to be repaid if you consolidate with another lender. The originating lenders can offer better discounts on unconsolidated Stafford and PLUS loans because lender margins are tighter on consolidation loans.

The Most Common Discounts

The most common loan discounts include a 0.25% interest rate reduction for having your monthly loan payments direct debited from your bank account (and also often requiring online electronic statement delivery). Many lenders also waive the origination fees on Stafford Loans. Depending on the guarantor, they may also waive the 1% guarantee fee.

Many lenders also offer additional discounts for making all of your monthly payments on time. For consolidation and PLUS loans many lenders offer a 1% interest rate reduction after 36 months of on-time monthly payments for as long as you continue making on-time payments. The on-time payments must be consecutive (no skips) and start when the loan enters repayment. (A few lenders offer a "repair option" which resets the on-time payment clock, but most lenders require all the initial monthly payments to be on-time.) For Stafford loans the most common discount involves a 2% interest rate reduction after 48 months of on-time monthly payments for as long as you continue making on-time payments. A recent trend is to replace these interest rate discounts with principal reductions after reaching a milestone, such as 3.33% principal reduction after 33 months.

The most common loan discounts include:
Direct Debit (ACH/EFT) Discounts: Interest rate reductions of 0.25% or 0.50% (Less common are 0.30%, 0.33%, 1.0%, 1.25%, 1.5%, 1.75%, 2.0% and 2.5% rate reductions, some of which also depend on on-time payment behavior.)
On-time Payment Discounts:
Interest rate reductions of 1% after 0 months, 1% after 36 months, 2% after 48 months. (Less common are split discounts, such as successive 0.5% rate reductions after 24, 36 and 48 months or successive 1% rate reductions after 24 and 48 months.)
Principal reductions of 3.3% (based on original loan balance) after 33 months, 7% (based on current loan balance) after 48 months. (Less common are split discounts, such as successive principal reductions of 1% at 24 months, 2% at 36 months and 3% at 48 months.) Some principal reductions may have a dollar cap (e.g., 1% principal reduction capped at $500).
Principal reductions of $295 or $595 after 12 months.
Credit for first 12 months interest applied after 12 months
Rebate origination fee of 3% minus $250 after 24 months.
Graduation credits of $250, $300, $500 or $750 (effectively a principal reduction upon entering repayment).
Forgive last 5 or 6 payments.
Forgive loan balance when drops below $600.

Loan Discount Caveats

There are a few important caveats about loan discounts:

On-time payment is a difficult hurdle. Requirements that all of your payments must be paid on time (usually defined as within 10 to 15 days of the due date) are difficult to maintain. Even if you sign up for automatic direct debit of the monthly loan payments from your bank account, you can still lose these benefits by having insufficient funds in your account. If you are late with a single monthly payment, you lose the benefit permanently. Most borrowers find it difficult to make 12 payments on time, let alone 36 or 48. Obtaining a forbearance or deferment can also cause you to lose the discounts. Note also that consolidation resets the clock on these discounts, assuming that the consolidation loan offers a similar prompt payment discount.

Rebates that must be repaid. Many fee rebates and principal reduction discounts include fine print that requires you to repay the discount if you consolidate your loan with another lender within a given time frame.

Minimum balances required for discounts. Many of the discounts require you to have a minimum loan balance to qualify, and the best discounts are reserved for borrowers who borrower the most.

The loan discounts often sound more impressive than they are in reality. Less than 15% of borrowers sign up for direct debit of the monthly payments because they want to maintain control over their accounts. Less than 10% of borrowers qualify for the full term of their prompt payment discounts. A prompt payment discount that requires 48 months of on-time payments for a reduced interest rate is effectively reducing the value of the discount by about 69%. This is partly because the discount is in effect for a reduced time period, partly because the interest portion of the monthly loan payment is lower the further you are into repayment due to a smaller remaining loan balance, and partly because of the impact of a discount on accelerating loan repayment. So a 2% interest rate reduction after 48 months may sound like a lot, but it's really the equivalent of a 0.63% interest rate reduction from the start of repayment. (A 2% rate reduction after 36 months is the equivalent of a 0.88% rate reduction from the start of repayment.)

The following table illustrates the equivalent discount at repayment for various discounts with delayed onset.


Moreover, these figures assume that you are able to make all your monthly loan payments on time. Most borrowers do not, further reducing the value of the discounts to borrowers. A review of lender SEC filings reveals that the combined cost of all the discounts, including the direct debit and prompt payment discounts, averaged less than 10 basis points (0.10%) over the past decade. That's less than 5% of the nominal "full" 2.25% discount and less than $50 per borrower on average.

The following table illustrates the relationship between the probability that a borrower will miss a payment and the value of the discounts, assuming a 2% interest rate reduction on a 10-year loan after 48 months of on-time payments for as long as the borrower continues making the payments on time. As this table shows, if you are likely to be late with just one of the 120 payments on the loan, your chances of getting the full benefit is about a third (1 in 2.7) and the expected value of the discount is only 0.60%. More realistic is a 1 in 36 chance of being late with a payment, which translates into about 1 in 4 borrowers getting some discount, less than 1 in 29 getting the full discount and an expected value of the discount of only 0.13%. (Note: These figures do not consider the reduced value of the discounts due to the lower loan balance at the time the discount is applied, along the lines outlined in the previous table. One can estimate the combined impact by multiplying the values in the following table by 0.63%/2.00% or 0.32. This is a simplification which will tend to slightly overestimate the actual discount; more accurate figures could be obtained by running Monte Carlo simulations.)


In an open letter to borrowers, Tim Fitzpatrick, CEO of Sallie Mae, said that "approximately 70 percent of borrowers" lose prompt payment discounts by consolidating their loans within the first year of repayment, and that "only about 20 percent of borrowers who do not consolidate make their first 36 monthly payments on time." He added that "the bottom line is that less than 10% of borrowers will earn all the advertised Repayment Benefits as they will either consolidate their loans or miss a scheduled payment sometime during the first several years of repayment." If only 20 percent of borrowers make their first 36 monthly payments on time, that means that the probability of missing a payment is approximately 4.37% (1 in 23). Assuming a ten year repayment term and that the probability of missing a payment remains constant throughout the repayment term, this suggests that less than 0.47% of borrowers who don't consolidate get the full prompt payment discount (and less than 0.14% of borrowers overall). It is reasonable to assume that the probability of missing a payment decreases the further a borrower gets into the repayment term, so the percentage of borrowers getting the full prompt payment discount is probably higher than this figure. The figures in the Sallie Mae letter are consistent with less than 6 percent of borrowers getting any prompt payment discount (i.e., of the 30 percent who don't consolidate in the first year, 20 percent make the first 36 payments on time, and 20% of 30% is 6%). So the percentage of borrowers who qualify for the full prompt payment discount is somewhere between 0.14% and 6.0%, much less than the 10% figure mentioned in the Sallie Mae letter.


Tips for Evaluating Loan Discounts

Here are a few tips for evaluating Loan Discounts:
Be realistic about your ability to make all of the payments on time.
Focus on discounts that are immediate in nature and which you can't lose. These include discounts for direct debit of the monthly payments from your bank account, fee rebates you receive soon after signing up, and interest rate and principal reductions that do not require on-time payment.
When a repayment incentive requires on-time payments, prefer those that involve a shorter time period before you can qualify for the discount. A discount that is suspended for a short time period after you are late with a payment is better than one that terminates after a single late payment.
Be sure to ask the lender whether there is a minimum balance to obtain the discounts. Often the discounts require a loan balance that is higher than the minimum balance required to consolidate.
Sign up for the direct debit of the monthly payments from your bank account. It is more reliable and secure than sending the payments through the mail. You will be less likely to miss a payment.
Read the fine print on any discounts. In particular, ask whether you will have to repay the discount if you consolidate your loans.
Ask what is considered an "on-time" payment; usually this is within 10-15 days of the due date, but for some lenders it can be within 30 days of the due date.
Some colleges have negotiated additional discounts with particular lenders, so be sure to ask if there are any additional discounts for students from your school.
Ask whether a principal reduction is based on the original principal balance or the current principal balance at the time the rebate is applied. The latter is worth less, since you will have a lower principal balance after making the required number of on-time monthly payments. When the lender fails to specify that the principal reduction is based on the original principal balance, it usually means that the reduction is based on the principal balance at the time you qualify for the reduction.
Some lenders require you to request the discounts in writing within a specific time period. Be sure to read all the fine print.
Ask whether the 0% fees are an actual waiver (upon disbursement) or a delayed credit (at repayment or later). The former is more valuable than the latter. Some lenders are failing to disclose that "0% origination fees" are actually implemented as a delayed credit.

Loan Discount Comparison Charts

The following pages offer basic comparison charts that highlight the loan discounts each lender offers for each type of loan. The discounts each lender offers usually depend on the type of the loan, since lender profits vary by loan type. Only lenders that offer loan discounts are included in these charts.

Types of Repayment Plans

The repayment plans are as follows:


Standard Repayment. Under this plan you will pay a fixed monthly amount for a loan term of up to 10 years. Depending on the amount of the loan, the loan term may be shorter than 10 years. There is a $50 minimum monthly payment.

Extended Repayment. This plan is like standard repayment, but allows a loan term of 12 to 30 years, depending on the total amount borrowed. Stretching out the payments over a longer term reduces the size of each payment, but increases the total amount repaid over the lifetime of the loan.

Graduated Repayment. Unlike the standard and extended repayment plans, this plan starts off with lower payments, which gradually increase every two years. The loan term is 12 to 30 years, depending on the total amount borrowed. The monthly payment can be no less than 50% and no more than 150% of the monthly payment under the standard repayment plan. The monthly payment must be at least the interest that accrues, and must also be at least $25.

Income Contingent Repayment. Payments under the income contingent repayment plan are based on the borrower's income and the total amount of debt. Monthly payments are adjusted each year as the borrower's income changes. The loan term is up to 25 years. At the end of 25 years, any remaining balance on the loan will be discharged. The write-off of the remaining balance at the end of 25 years is taxable under current law. There is a $5 minimum monthly payment. Income Contingent Repayment is available only for Direct Loan borrowers.

As an alternative to income contingent repayment, FFELP lenders offer borrowers Income Sensitive Repayment, which pegs the monthly payments to a percentage of gross monthly income. The loan term is 10 years.

All four plans are available for student loans, but only the first three plans are available for parent loans.


Loan Term for Extended/Graduated Repayment

For extended and graduated repayment, the following chart shows how the maximum loan term depends on the amount borrowed.
Loan Balance Maximum Loan Term
Less than $7,500 10 years
$7,500 to $10,000 12 years
$10,000 to $19,999 15 years
$20,000 to $39,999 20 years
$40,000 to $59,999 25 years
$60,000 or more 30 years



No Prepayment Penalty

All Federal education loans allow prepayment. For loans that are not in default, any excess payment is applied first to interest and then to principal. However, if the additional payment is greater than one monthly installment, you must include a note with the payment telling the processor whether you want your prepayment to be treated as a reduction in the principal. Otherwise, the government will treat it as though you paid your next payment(s) early, and will delay your next payment due date as appropriate. (It is best to tell them to treat it as a reduction to principal, since this will reduce the amount of interest you will pay over the lifetime of the loan.)

Due to the way the income contingent repayment plan treats interest, it is not advisable to prepay a loan in the income contingent repayment plan.


Can Switch Repayment Plans

If you want to switch from one plan to another, you can do so once per year, so long as the maximum loan term for the new plan is longer than the amount of time your loans have already been in repayment. (In other words, if you are in year 26 of a 30-year extended repayment plan, you cannot switch to the income contingent repayment plan and have the remaining balance written off.)


Repayment Plan Calculators

FinAid offers several calculators for evaluating the tradeoffs of different repayment plans.

The Loan Payment Calculator may be used to calculate what your monthly payments would be under the standard and extended repayment plans.

The Loan Comparison Calculator is like the loan payment calculator, but allows you to compare three loans side by side.

The Income Contingent Repayment Calculator may be used to calculate an estimate of what your monthly payments would be under income contingent repayment plans, and compares the total payments with the standard and extended repayment plans.

The Undergraduate Master's and Doctoral student loan advisor calculators provide an estimate of the debt the student can reasonably afford, given the expected starting salary for their field.

The Parent Loan Advisor provides parents with an estimate of the amount of educational debt they can afford for their children's education, given their current salary and other debt obligations.

The Cost of Interest Capitalization calculates the additional cost over the lifetime of a loan if a student capitalizes the interest of an unsubsidized Stafford loan during the in-school period.

There are also other loan calculators in the Calculators section of FinAid, including a Loan Analyzer that does a detailed comparison of the financial impact of various loan features, including loan fees, interest rates, repayment terms, interest capitalization, and prompt payment incentives.

Frequently Asked Questions about Consolidation

The following is a list of common questions about student loan consolidation. These are genericized versions of actual questions received through FinAid's free Ask the Aid Advisor service.


Are there any minimum balances required to consolidate?

Some lenders require a minimum balance before they will accept a consolidation loan. Typically this is $7,500, although some lenders will allow you to consolidate with only $5,000 in loans, and the Federal Direct Consolidation Loan Program does not have a minimum balance.

Does consolidation affect my credit rating?

No. Education debt is considered "good debt", as it represents an investment that generally increases your ability to earn money to repay debt. Even though consolidation may increase the term of the loan, it does not appreciably change repayment behavior. (Defaulting on your education loans, on the other hand, will negatively impact your credit rating.)

How do I go about consolidating my loans?

Although the repeal of the single holder rule means that you can consolidate with any lender, it's generally a good idea to talk first with the current holder of your loans. They have all the paperwork, so the process is often simpler with the current holder of your loans. This establishes a baseline against which you'll compare other lenders. Another lender may offer better customer service or loan discounts that make it easier to repay your loans. (Note that completing a consolidation loan application takes only about half an hour, so the paperwork burden is minimal even if you use another lender.)

Until you receive notification that the consolidator has paid off your original loans, continue making payments on those loans. You don't want to go into default on those loans, since that would prevent your consolidation loan application from moving forward.

Are there any ways to save money through consolidation?

It can pay to shop around. Although federal law sets the rates on student loans, those rates are the maximum rates. Nothing prevents a lender from charging lower rates. Many lenders offer loan discounts for having your monthly loan payments direct debited from your bank account (e.g., 0.25% interest rate reduction). They may also offer an interest rate reduction for making on-time monthly payments (e.g., 1% interest rate reduction after 36 months of on-time payments for as long as you continue making on-time payments).

Note, however, that if you are late with a single monthly payment, you lose the interest rate reduction permanently. Less than 10% of borrowers succeed in obtaining the full benefit of an on-time payment discount. (Even borrowers who sign up for automatic direct debit of the monthly payments can miss a payment if they have insufficient funds in their account.)

We recommend focusing on the discounts that you can't lose, such as discounts for signing up for direct debit of the monthly payments. Next look for discounts that are more immediate in nature, such as those that offer a reduction in principal or a rebate of the loan fees. When a repayment incentive requires on-time payments, prefer those that involve a shorter time period before you can qualify for the discount. A discount that is suspended for a short time period after you are late with a payment is better than one that terminates after a single late payment.

Call your lender to ask about their consolidation loan programs and any special discounts. Then shop around by calling other lenders. The FinAid site includes a large list of student loan providers, many of whom offer student loan consolidation.


Can parents consolidate PLUS loans? Should they?

Yes, parents can and should consolidate PLUS loans. Consolidating a PLUS loan can yield some savings, since it reduces the interest rate from 8.5% to 8.25% due to the cap on the interest rates of consolidation loans.

I have just one loan. Can I consolidate?

Yes, so long as the loan being consolidated is not itself a consolidation loan. To reconsolidate a consolidation loan, you must be including additional loans. Otherwise, you can consolidate even just a single loan.

I consolidated a few years ago. Can I consolidate again?

Consolidation loans may only be reconsolidated when you are adding more loans to the consolidation. If you do not have other federal education loans to include in the new consolidation loan, you cannot reconsolidate a consolidation loan. Note that reconsolidating a consolidation loan does not relock the interest rates on the loan.

I have not yet graduated. Can I consolidate my loans?

No. The early repayment status loophole was repealed, effective July 1, 2006. In addition, the ability of Direct Loan borrowers to consolidate during the in-school period was also repealed on this date. You can only consolidate during the grace period or after your loans enter repayment. (If you drop below half time enrollment status, your loans will be eligible for consolidation. Summer enrollment and accelerated programs, however, generally do not qualify you to consolidate your student loans.)

I qualified for a 2.25% discount on my unconsolidated Stafford loans (i.e., 0.25% interest rate reduction for direct debit and 2% interest rate reduction after 48 months of on-time payment). If I consolidate, will I lose these benefits? Is it still worthwhile to consolidate?

A consolidation loan is like a refinance. It is a new loan that pays off the original loans. If you consolidate your loans, you will lose any existing loan discounts, especially if you change lenders.

To determine whether it is worthwhile to consolidate, you need to compare the value of the loan discounts you will get if you consolidate with the value of the loan discounts you retain if you don't consolidate.

If you have loans with Direct Lending, you may have to repay the 1.5% rebate you obtained from Direct Lending if you consolidate with the FFEL (bank-based) consolidation loan program.

I don't remember who my lender is. Help!

The financial aid administrator at your college may be able to help. You can also look up your lender online. See FinAid's Lost Lender for information about the National Student Clearinghouse's Loan Locator service and the NSLDS Student Access.

Can I consolidate private education loans? Can I consolidate my Federal and private loans together?

You cannot consolidate private education loans into the Federal consolidation loan program. However, some lenders offer private consolidation loans for those loans. We do not recommend including federal education loans in a private consolidation loan, as this often increases the interest rate. You will also lose several important benefits of the federal education loans, such as flexible repayment terms and generous loan forgiveness and cancellation provisions. Consolidate your federal loans separately, with the federal consolidation loan program.

Tools for Evaluating Consolidation Options

FinAid's Loan Consolidation Calculator can help you understand the tradeoffs of consolidating your loans. It compares the reduction in the monthly loan payment with the increase in the total interest paid over the lifetime of the loan. It also shows you the interest rate on your consolidation loan.

Despite the switch to fixed interest rates on Stafford and PLUS loans eliminating a key financial incentive to consolidate, there are still several reasons to consolidate your education loans. These include having a single monthly payment, access to alternate repayment plans, the PLUS loan interest rate loophole, and the ability to reset the 3-year clock on deferments and forbearances. But consolidation can cut short the grace period, although the grace period loophole can work around this problem. It is best to avoid consolidating Perkins loans, because you lose several valuable benefits. Beware of extending the term of your loan, as this can increase the total interest paid over the lifetime of the loan; you can stick with standard ten-year repayment.

Repayment Plans

Consolidation loans provide access to several alternate repayment plans besides standard ten-year repayment. These include extended repayment, graduated repayment, income contingent repayment (Direct Loans only) and income sensitive repayment (FFEL only). If you do not specify the repayment terms, you will receive standard ten-year repayment.

Consolidation loans often reduce the size of the monthly payment by extending the term of the loan beyond the 10-year repayment plan that is standard with federal loans. Depending on the loan amount, the term of the loan can be extended from 12 to 30 years. The reduced monthly payment may make the loan easier to repay for some borrowers. However, by extending the term of a loan the total amount of interest paid over the lifetime of the loan is increased.

In certain circumstances (for example, when one or more of the loans was being repaid in less than 10 years because of minimum payment requirements), a consolidation loan may decrease the monthly payment without extending the overall loan term beyond 10 years. In effect, the shorter-term loan is being extended to 10 years. The total amount of interest paid will increase unless you continue to make the same monthly payment as before, in which case the total amount of interest paid will decrease.

You do not need to pick an alternate repayment plan. We recommend sticking with standard ten-year repayment, because it will save you money. The alternate repayment plans may have lower monthly payments, but this increases the term of the loan and the total interest paid over the lifetime of the loan. See our caveat about extended repayment below.

Repayment on a consolidation loan will begin within 60 days of disbursement of the loan, unless the borrower qualifies for an deferment or forbearance.

Federal education loans, including consolidation loans, do not have a prepayment penalty. So you can pay off all or part of your federal education loans without incurring a penalty. If you want to take advantage of this, be sure to include a letter with the extra payment indicating that it should be applied to reducing your principal. Otherwise, the lender may treat it as an advance payment of the next month's monthly payment.

Which Loans Can be Consolidated?

Any federal education loan can be consolidated. You can even consolidate a single loan. There are, however, a few restrictions on consolidating a consolidation loan.

You can consolidate a consolidation loan only once. In order to reconsolidate an existing consolidation loan, you must add loans that were not previously consolidated to the consolidation loan. You can also consolidate two consolidation loans together. But you cannot consolidate a single consolidation loan by itself. These restrictions have been in effect since early 2006.

Note that when you reconsolidate a consolidation loan, it does not relock the rates on the consolidation loan. The consolidation loan is treated as a fixed rate loan within the weighted average interest rate formula used to calculate the interest rate on the new consolidation loan. Consolidation does not pierce the veil on previous consolidations.

The new restrictions on consolidating a consolidation loan limit your ability to use consolidation to switch lenders. Generally, you will consolidate your loans once, toward the end of the grace period or after the loans enter repayment, and then be locked into that lender for the lifetime of the loan. If you want to preserve your ability to use consolidation in the future to switch lenders, you should exclude one of your loans from the consolidation.