Student loans are loans that are offered to students to assist in payment of the costs of professional education. The government of the country offers these loans and at a very low rate of interest.
Student loans are a great help to students who plan to do further studies, in their own country or abroad, but lack the requisite funds to do that. In this way student loans not just assist the student but also his family.
Many institutes and universities offer student loan. There are different types of student loans. So there are several options available for students to choose from. Broadly there are two types of loans available: Federal loans and Private Educational Loans.
The students opting for Federal Students loan program are funded and administered initially through the US Department of Education’s Federal Student Aid Programs. These loans are the easiest to get student loan consolidation services. The Federal student loan programs disburse about $60 billion a year. Stafford loans are the most common form of federal loans for students.
Private student loans are administered by standard lending institutions. The most commonly opted loans in this are Sallie Mae Signature and the Citibank student loan. These organizations provide unsecured loans to a student and charge hefty interest on it.
A student can combine the private and the federal loans to gather funds for his further studies. However a student should bear in mind that these two loans should not be combined or consolidated. He should consolidate his federal loans first and then separately consolidate privately the student loan debt.
Student loan consolidation refers to building all your student loans into a single loan with one lender and one repayment plan. You can plan to consolidate your loan like refinancing a home mortgage. The time you consolidate your loan, the balances of your other current loans are paid off, with the total balance playing over into one consolidated loan. However at the end you will be left with just one student loan to pay off. The student loan can be consolidated by the student as well as his family i.e. parents. Continue Reading