"All I had to make a mark on the site Sallie Mae, check multiple boxes and wait for money to be paid," she said. "The idea is not to extinguish it really hit you until the end of the school is near."
If the task of the student loan repayment easier than removing them. Instead, it is a complex process, with which millions of young graduates struggling. Two out of three students to leave the stage end with some form of student debt, according to 2008 study College Board. Average: $ 22 700 per graduate - and that does not count student loans debt incurred by half of incoming students who never graduate.
The three federal loans and private in September, Emily is in a situation familiar to seniors and recent college graduates across the country. Like her, many people consider consolidating their loans as a way to reduce your monthly payments and simplify your finances. The theory is that either by lengthening the repayment or refinancing at lower interest rates, borrowers can reduce monthly payments. Unfortunately, this is not a strategy that works for everyone.
The problem for people like Emily that federal loans can not be combined with the private. Another is that since July 2006, all student loans from the federal government began to carry a fixed interest rate. Until then, federal loans were issued at variable rates, due to consolidation, borrowers can often block the rate that was lower than what they paid for each loan separately.
Now "there is no financial benefit consolidation federal loan, with the exception of having a single monthly payment and access to alternative payment plans," said Mark Kantrowitz, publisher of FinAid, the Web site that tracks the industry, the financial support of colleges.
If you can afford to make payments on your loans, Kantrowitz said the consolidation will not help you. If, on the other hand, you have trouble making monthly payments, or think in the future, consolidation could have a few options.
Remember, however, that although almost all of the monthly payment plans below, they also add a few thousand dollars in interest by extending the loan period. For example, if you stretch a standard student loan from 10 years to 20 years, you can reduce your monthly payments by 34%, but end up paying double the amount of interest during this period, Kantrowitz said.
If some or all of your loans have been written up in July 2006 - say, in your first year of college when a graduate this year - wait until after July 1, 2009 to consolidate, Kantrowitz suggests. He predicts interest rates will fall to the lowest level of 2.6% from the current level of 4.2%. The problem is too fast? Borrowers who already consolidated will not be allowed to do it again on a new course.
Since July of this year, borrowers who took out loans federal student can choose a repayment plan based on new revenues. This may be a smart option to enter these fields with relatively low wages, as a public service. Under the plan, which is open to all, with federal loans, monthly payments of a maximum of a certain percentage of the borrower's income.
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The rate is defined as the difference between adjusted gross income (the amount for which you are subject to payment of federal taxes) and 150% of federal poverty level (which comes to $ 16 245 for a single person without children, based on current exchange rate).
For a single person without children and adjusted gross income of $ 40,000, monthly payments would be capped at $ 365. Wage increases will increase the monthly payment. If the total amount borrowed is still after 25 years of these payments, the balance forgiven.
Students who have already started to repay the loans, you can choose a repayment plan based on income, but there is one important caveat: It will restart the clock and give credit for the new term of 25 years, ext.
Emily, New York University's higher because many students were forced to turn to private loans to cover what federal programs will not. Private loans, unlike the federal match a variable interest rate. Consolidation, students can save money.
If a borrower took out a loan, it is a limited credit history, as most students do three or four years of making regular payments on your credit card or an impressive history of employment can improve the credit score of 100 points or more. This, in turn, could convince the lender to reduce the interest accrued as a result of the consolidation loan.
"Borrowers may get a lower price now, and their rates can jump higher in the future," says Kantrowitz.
Another potential benefit of consolidation personal loan guarantor disposal that can save a family member or liability. This was possible after 24 to 48 months to make regular payments.
If you want to consolidate private student loans, you should contact either the Chase, NextStudent, student loans and a network of Wells Fargo (WFC - news - people), Kantrowitz suggests. They all offer somewhat different conditions, and all restrictions on the size of the total debt can be consolidated.
Important questions to ask a consolidator, if it imposes costs arise, if there are prepayment penalties, the maximum rate of interest is the fact that the term of the loan will be. Please read the terms and, if possible, have a friend or relative, the same thing. If you do not understand something, ask the lender to get a clear answer. In the end, you enter into a contract that can last up to 30 years.
Avoid any lender who charges a fee for early repayment. You want to be able to repay the loan early without being punished for it.
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