How to choose the best student loan consolidation?

If you seriously looking for the best student loan consolidation, here are some major checklists you need to know before making a deal!

Finding and choosing the best student loan consolidation program are not always easy for everyone. To find the best one, there are several points that should be carefully concerned! On the other hand, the wrong choice can be potential to lead to late payments or other problems associated with your finance after graduation.

If you still don’t have any idea on selecting the best one that meets you expectation. The following are some helpful tips!

Get to know your option between federal or private loan consolidations!

In general, if all your original loans were taken from private loans, you should also choose private consolidation. On the other hand, if they were derived from federal sources, it’s much better to continue your step by seeing a consolidation lender who also works at auspices of federal loan programs.

Another thing you need to consider is about issue of federal lenders that tend to exert fewer requirements than privately connected lenders. Private lenders usually determine the chance of your approval based on your personal credit history. Typically, you don’t have pretty much credit history if you have just graduated. For this reason and if you choose consolidating your student private loans, your private lender may ask you to have a cosigner.

Consider the interest rates

Lower rates mean more money you can save when repaying your loans. And there are two major factors that significantly affect these rates; your own credit history (as noted before) and the rate fluctuation with the market. Though the range of interest rates is almost same from company to company, but it’s much better to compare the rate of different companies. And then find one that offers the lowest rate!

Talking about the interest rates, you can find two major options; variable and fixed interest rates. If you are looking for the steady option of interest rate, fixed rate is the answer. It is pretty common in federal student loan consolidation. And on the other hand, for variable rates – they are pretty common in private loan consolidation.

Learn the terms and conditions carefully!

It’s important to completely read the terms and policies of a program that choose. Below are some common crucial points of terms and conditions you need to concern:

1.      About the amount of loan. Avoid signing any contract that doesn’t completely retire all amounts of your outstanding loan – including for any fees of adjustments or odd fees!

2.      Fees you need to pay! They are usually calculated based on your own credit score.

3.      Choose the right deferment time!

4.      Consider also about the maturity or the amount of time the lenders will lend you to fulfill your obligations. In general, the smaller your monthly payments, the longer you can completely repay the debt – and vice versa!

5.      And it’s much better to avoid cosigner if you can, because it may complicate the process in long term.

The last but not least – consider also a plan of payment that typically cannot be deferred if you have a plan to go back to college someday!