Nowadays, it is not uncommon for college students to apply for multiple student loans to finance their studies. With clear financial records and purpose, any student should be able to get the education loans they need. Problems with multiple student loans perhaps will arise as soon as the borrower (either students or their parents) have to repay what they have borrowed. Various amounts of loans with various interest rates as well as various repayment terms are not easy to manage and it is easy to get mixed up between them. Additionally, when a student comes across financial hardships following his/her graduation, repaying the loans can be a tremendous burden.
To solve these problems, you can apply for a student debt consolidation loan which combines all your borrowed funds. By consolidating your various loans, you will only have to pay to one lender each month. Besides, you will also get other benefits such as a fixed interest rate and longer repayment period. The rate is actually the weighted average of the interest rates of all the loans. Since the rate is rounded up to the nearest 1/8 of a percent, you might end up with a slightly lower or higher interest rate. The repayment term, on the other hand, ranges from 10 to 30 years depending on the total amount of the loan and other considerations that will save you up to 50% payment per month.
Generally, most federal student financial aids such as FFELP (Stafford, PLUS, and SLS), NSL, FISL, HEAL, Perkins, Guaranteed Student Loans, Health Professional Student Loans, and Direct loans can all be consolidated into one loan. If you have private student loans, however, consult your lender about the possibility of consolidation since several lenders also provide private consolidation loans. Lenders that provide such service include Student Loan Network, Chase, Wells Fargo, and NextStudent.
All students as well as parents with educational loans are welcome to apply for the loan consolidation. Nevertheless, students and parents from the same family cannot merge their loans together into one master loan so they must apply for it separately. The regulation states that only multiple student financial aids under the same borrower can be consolidated. The same regulation also applies to married students. Hence, their educational loans should also be consolidated separately. This regulation was active per 1 July 2006 to overcome problems involving divorced students since the consolidation loans cannot be separated.