Student loan is imperative if you are unable to meet the educational expenses. The loan for students comes with significantly lower level of interest and relaxed repayment terms. They are easy to get due to quick processing. In spite of all these facilities, it is unfortunate that some default on student loans and number of the defaulter in on the rise. You are included in the 'defaulter' bracket if you fail to meet monthly installment for up to two hundred and seventy days. It is the worst financial messes that you find hard to get out of. With no scope to evade the payment, getting a relief may seem to be a dream for you. Do not fret and frustrate, you can certainly have a peace of mind with help of student loan consolidation.
Loan consolidation is the only and ideal way to merge all the current loans into a single one. In a simplified term, student loan consolidation is all about meeting a single payment instead of multiple ones. A revised repayment criteria will be issued by a new lender and the aggregate of previous balances is to be paid off through singular monthly payment after regular interval. The interest rate for the consolidated loan is determined by calculating the average of the existing loans.
Both the students and their parents can apply for loan consolidation. Student loan consolidation provides the students with several benefits. When the loans are consolidated, the interest rate drops and as a result, the volume of monthly payment also dips. A chunk of loan burden falling off, the defaulting students find it easier to meet reduced payment on time. In case of student loan consolidation, the repayment period is stretched longer to trim the size of the periodic payment. It is possible for the students to share the facility of loan consolidation with another person, such as spouse. But this is not a preferred solution for many as both of them have to meet the necessary criteria to apply for joint student loan consolidation. The burden of repayment is to be carried even after the couple separate or divorce.
The majority of the Federal loans including FFELP, FISL and some of the private loans can also be consolidated. The student loan consolidation is offered by different banks as well as private lenders. Help regarding loan consolidation is also extended by the Department of Education. Generally the 'defaulter' tag makes a dent into your so far impressive credit record. The result is you will be denied loans and can not qualify for the most of the credit cards. Several problems may hit you in the event of defaulting on payment. You may experience wage garnishing, seizing of tax funds and be sued in the court too. Fortunately, there are means to mend your poor credit record in order to recover from defaulted loans. Apart from student loan consolidation, you may also try loan deferment. By deferring your payable amount for a specified period, you may enjoy some short-lived relief. Remember that interest will accumulate even during the period of loan deferment and you have to pay if off too.