How to Consolidate Federal Student Loans
If you are a student and facing difficulty in paying back several loans then a Federal Consolidation Loans for students is certainly your best bet. This loan helps you in combining all the federal loans and allows you to devise a new monthly instalment plan.
However, you must keep in mind that there are also some disadvantages of this facility and a financial crisis can become even worse if you do not do it right. You will have to review all the options first and this can be done by following a simple yet effective procedure.
Instructions
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1
Do you really need it?
First of all, you should ask yourself why are you want to consolidate your loans. Federal loan consolidation is a valid option if you are under some financial burden and it is getting difficult to pay the instalments. You should evaluate your income, calculate the expenses, check your savings and consider the monthly instalments. If you are unable to make payments in time, borrowing money to keep things moving or using savings to pay back the amount then you should not hesitate in rearranging your finances. -
2
Apply in proper manner:
Next thing you should do is to determine the proper method of applying for consolidation. You can apply online by filling the required form or there is also an option to submit the form by post. Supplemental Loans for Students (SLS), Federal Perkins Loans, Health Education Assistance Loans, Direct Unsubsidized Loans and Federal Family Education Loan are few examples of loans that can be consolidated. -
3
Pick the financial institution:
Another important thing you should consider is the financial institution. You can get a consolidation loan with a financial company, bank, lenders or credit cards. However, the best way is to involve a bank in this process as they are more trustworthy financial sources. -
4
Devise an instalment plan:
Now, when you have done all the homework, it is time to devise an instalment plan. Again, you should keep your income and expenditures in mind while doing all this. However, you cannot get everything of your choice so try to find a middle ground. Moreover, you should also keep in mind that the average interest rate is eight percent. -
5
Avoid the financial scams:
You must not fall prey to cheaters. Be vigilant of the companies that offer you extra relaxation in payment plans.
