Student Loan | Compare Student Loan Consolidation
January 16, 2012 – 7:34 am
Loan agencies
As the name implies, federal loan consolidation is offered by the federal government. It doesn’t need credit check or co-signer (guarantor) because this loan consolidation program is protected by the federal government.
Private student loan consolidation is offered by banks, loan agencies or credit unions. And depending on the loan agencies, you might need to provide a co-signer or get your credit history check.
How they wor
Both programs are meant to combine the multiple loans you have into one loan and extend your loan period so that you can enjoy lower monthly payment. For federal student loan consolidation program, you can only combine your federal loans. But for private student loan consolidation, it is possible to consolidate your Student Loans together with your personal loans.
Besides that, when you are going for federal student loan consolidation, your interest rate will be lock at the current low interest rate for the whole loan period. For private student loan consolidation however, your interest rate might fluctuate with the market rate. You can try to talk to the loan agency to look at the possibility of getting the lowest interest rate.
You can improve your credit score when you consolidate your student loans with both programs. This is because when you have consolidated your loans, you are being seen as servicing one single loan instead of multiple loans.
It is said that you will enjoy lower interest rate with federal loan consolidation. However, you can negotiate with the private loan agencies to see if there is any alternative for you to get a better interest rate.
And for your information, you are allowed to consolidate once with private agency and once with federal agency. So, think properly before you sign up for any student loan consolidation program.
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Tags: Compare student loan consolidation, consolidate federal student loan, consolidate student loan
