Student Loan Consolidation Info - Raise Your Credit Score With A Consolidation Loan

Ian Wilkie asked:

A student loan consolidation can help you save money and reduce the amount of long term debt load you carry while raising your credit score at the same time. Improving your credit score over time can help you considerably as you start out in the real world and will have the need to purchase a new car, or get an apartment or maybe buy a house, and also be able to have a charge card. Lives are built on having good credit to borrow the money you need when you have started your career and have the means to make monthly payments to finance your dreams. If you are in debt with multiple student loans, take the time to investigate the benefits of getting a student consolidation loan to help you start making just one payment each month and give your credit the boost it needs by sticking to your loan consolidation payment schedule.

Read some other tips to boost your credit score on Student Loan Easy.

Government Student Loans For Starters

There are many factors that you must think about if you want to request government student loans. These loans are overseen by the government, and have a set criteria that needs to be met in order for you to be eligible to request that loan. However, as they are government controlled, several universities are more inclined to work with individuals with this source of financing rather than those who are working exclusively with private loans.

When you apply for government student loans, there are two primary styles that you will work with. The first type is for individuals who wish to register without a parent. The second style needs a co-signer. Within both of these two types, there are several offers for the government student loans. The primary differences in the several offers is where the funding is issued from. Some programs have the funding coming directly from government finances gathered from tax payer funds, while other programs borrow cash from financial institutions in order to finance your loan.

The first requirement for government student loans is credit. Credit is the foundation in which the government evaluates to judge if you are at great risk of returning money to the student loan. If you do not have a credit history, either good or bad, you will commonly need a guardian to be allowed to acquire the loan. If you have bad credit, a co-signer will be required and that individual will be legally accountable for whether or not you pay the funds owed to the government.

Government student loans are predetermined in how much money they will give out to people. The amount is determined by which year of schooling you are in. There are a few situations where you can go beyond the typical maximum loan. However, in these types of government student loans, you will typically pay interest from the time the government gives the school the funding until it is paid off. This is known as an unsubsidized loan, and can be among the most expensive types of funding there are.

The interest rate that you return for government student loans is usually fixed for the life of the loan. However, the rate that you pay will be determined by the current financial standings of the government. Usually, the offer prevents interest rates from growing too costly, as this is against what the federal loans for students program was created for.

ASK THE EXPERT

As told to Plain Dealer reporter Teresa Dixon Murray

Higher education is the top investment we can make in ourselves and our future. Even in the best of times, most families pay for college through a patchwork of savings, current income, loans, grants, scholarships and/or work-study from federal and private sources. A little effort can pay off big time in closing your daughter's $12,000-per-year gap through one or more of the following sources:

Federal aid

The FAFSA (Free Application for Federal Student Aid) is the tool to explore every federal parent and student loan, grant and work-study financial aid option. Early in each new year is the perfect time to complete the FAFSA at fafsa.ed.gov. )

Grants are the best type of federal aid. They don't need to be repaid. Think of grants as gifts. Examples include the federal Pell Grant, Federal Supplemental Educational Occupation Grant (FSEOG) and the National SMART Grant for high-achieving students in math and science.

Next best are work-study opportunities (as long as a job doesn't interfere with academics), and need-based Perkins and Subsidized Stafford loans for students, and PLUS loans for parents. Need-based loans have the lowest interest rates and deferred repayment options.

Last but not least is the Unsubsidized Stafford loan, which is not based on financial need. Many families qualify for this type of federal student aid. The interest rate is competitive, but repayment is not postponed or subsidized by the government as with the Subsidized Stafford.

After filing the FAFSA, you will receive a "Student Aid Report" summarizing the aid available for the coming school year. Aid is granted one year at a time.

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