Low Interest Student Loan Consolidation Can Help You Get Out Of Debt Faster

College graduates often have a variety of loans outstanding and while a few loans with decent interest rates may not seem like a problem, if you are not careful, those loans could start becoming a burden to your finances and hurt your credit score.  A low interest student loan consolidation may be the thing that can help you get rid of student loan debt faster.

Multiple loans from various lenders can be tough to handle.  If you have only one or two student loans under one or two interest rates, consolidation may not be best for you, but if you have multiple forms of student debt, and you don’t have much financial savvy, you may want to look into your options for low interest student loan consolidation.

If you do discover that consolidation is the best route for you there are a few things to be aware of.  First, certain types of loans will not consolidate, like federal, private or institutional loans.  Typically, if you have multiple federal loans and an institutional loan, you will not be able to consolidate these into one loan, so check to be sure you are able to group your debt under one roof.

For instance, if you have a student debt consolidation loan and one outstanding loan like a institutional loan, that can be manageable, but keep in mind the repayment period on your consolidation.  A low interest student loan consolidation loan may bring an affordable monthly payment, but it could cost you much more over the long run if you only pay minimal payments.

Making a budget and repayment plan of your own can save you interest and get you out of debt faster, so you may also want to look into paying more than your minimal requirement on your loan consolidation each month.


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Student Loan Debt Consolidation through the US Education Department

Difficult economic times have hit everyone including student loan borrowers. Students who have been forced to quit school before completing their degrees and graduating scholars are finding it difficult to locate good paying jobs—some are unable to find any type of work whatsoever. Additionally, companies have been laying off employees in the hopes of surviving a brutal economy. Because they have been laid off or are having difficulties locating jobs, individuals are finding themselves unable to repay loans. If you have student loan debt, you may find welcomed relief in student loan debt consolidation programs offered by the government.

Debt Consolidation Programs offered by the US Department of Education
Two debt consolidation programs offered by the US government are the Family Education Loan Program and the William D. Ford Direct Loan Program. These student loan debt consolidation programs offer you an opportunity to combine multiple student loans, extend repayment periods, lock in interest rates and reduce monthly payments; hence you are able to prevent defaults and avoid financial ruin. Through the consolidation programs, you may consolidate multiple student loans into one loan and extend your payment period between 10 and 25 years, depending on the option you selected.

Loan Consolidation Program Description
Funding for the Family Education Loan (FFEL) Program is provided by private lenders and the loan is guaranteed by the government. A guarantee by the government means that should you default on the loan, the federal government would repay the private lender. You would then be required to repay the government. Conversely, if you are participating in the William D. Ford Direct Loan Program you receive funding from the federal government. Interest rates on FFELs are 6% for undergraduate students and 6.8% for graduate students while interest rates on Direct Loans are 5%. In both programs, either you or your parents are eligible for these loans.


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