To Consolidate Student Loan Debt or not !

By: A Procos

Consolidating student loans, like debt consolidation of traditional loans you can also opt for federal student loan debt consolidation.

Consolidation means your loans are bundled together into one new loan at a different rate of interest.

If you plan to consolidate your loans, do not include your spouse's loan with yours. The danger of consolidating your and your spouse's student loans is that if something happens to either one of you, your spouse will still be responsible for that loan. The burden of your private loan repayment would fall upon your spouse. This is where a life insurance policy beneficial, with your spouse as a beneficiary. This protects them from having to pay back your loan. Though there are no deadlines in federal loan consolidation programs, there are certain requirements that need to be fulfilled:

Your loans have to be fully disbursed to be eligible for Federal Consolidation Loan program.

You are no longer enrolled in school.

You are actively repaying your loan (including deferment or forbearance), or are in your six-month post-graduate grace period.

Your minimum consolidated loan amount is $10,000.

The best time to go for debt consolidation of your federal student loans is when you still are in your grace period, because of the lower in-school interest rate.

Every student has his or her reasons for going in for student loan debt consolidation, and so would you. These are some of the reasons why you should consider debt consolidation of your federal student loans:

Fixed rates of interest.

Lower monthly payments.

Payment incentives that save you money.

Single payment each month in place of multiple payments to different loan issuers.

New or renewed deferments.

You will need the following information when applying for consolidation of your federal student loans:

The balances and interest rates of your current eligible federal student loans.

The names and addresses of the companies that hold or service your federal student loans.

These are the companies that handle billing, collections, deferments, etc. of your current federal student loans.

The names and addresses of two personal references in the United States of America.

Federal government student loan consolidations have a fixed rate of interest.The fixed rate is calculated by the weighted average of the interest rates of the individual loans being consolidated. These are rounded up to the nearest 1/8 of a percent, up to the maximum of 8.25 percent.

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