Debt consolidation loans from various financial institutions in Shaker Heights are one option to consolidate debts. If the loan has better terms than the consumer debt getting consolidated then the result will be lower interest rates and lower debt payments. The problem usually is finding a debt consolidation loan that has more favorable rates. Doing so all most always requires the debtor to secure the loan with collateral. More often than not this collateral is a residence and the loan is a home mortgage.
An Unsecured Loan
If there is no collateral available or the debtor does not want to provide any then the only option is to get an unsecured loan. Unsecured loans with better interest rates and payment terms than standard “off the shelf” consumer debt can be very hard to find in Shaker Heights, especially in today’s credit markets. If credit is not perfect then most likely only a subprime personal loan to consolidate debt will be available. This has a very low chance of improving the debtor’s financial situation and will most likely damage it.
Shaker Heights – Personal Loan to Consolidate Debt
When the need for a student loan arises due to the extreme financial challenges in your college years, fear not. Do not be too hard on yourself for incurring those loans. Even if you happen to acquire several student loans, there is no need to panic and run away from your creditors. Remember that there is still an option for you to consolidate federal student loans.
There are two major types of student loans, according to the provider specified. First is the federal student loan which is processed through the initiatives of the US Department of Education. They have implemented a Federal Student Aid program as a part of their campaign to provide equal education opportunity for all aspiring college students in the country. A federal student loan is handled by the Department of Education and they are known as one of the most considerate government sector, especially when the need to consolidate federal student loans arises. A known example of federal loans is Stafford loans.
Private student loans, on the other hand, are administered by privately owned lending institution. Some of the most well known private lending partners are also the leading financial institutions such as Citibank, Chase and Sallie Mae. Since interest rate is a variable among student loans, private lenders comparably charge higher interest rates than their federal counterparts. Of course, this also means that the demand of a government student loan is also tighter in any case.
For those who have incurred a number of federal student loans, the daunting task of paying off the said loans separately and efficiently can be overwhelming. Because of this, many student borrowers opt to consolidate federal student loans in order to better manage their finances.
Once a student has decided to consolidate their federal student loans, there are conditions that they operate under. First is that they should have more than one federal student loan. Next is that students should be in good standing with each existing government loan account. This means they are either in their six-month grace period or they have already made three monthly repayments for each of the multiple loans.
Under the wing of a federal student loan, there are also distinct differences between a subsidized and unsubsidized federal student loan. Although they can still be merged into one loan account for the student borrower to consolidate their loans, be reminded that they will be segregated first to the federal loan type they belong to.
Unsubsidized federal student loans go with other unsubsidized federal student loans; and the same goes for subsidized student loans. Although the idea is to unite them into one whole account, they will still be divided into two smaller parts because federal student loans are to be monitored by lenders separately, as mandated by law.
Do not worry though, if you consolidate all your federal student loans, only one payment should still be arrange monthly. The segregation of the loan payments, although an interesting bit for borrowers, is also arranged internally by the creditors.
Types of Debt Consolidation Loans
Student loans consolidation is a concept which is designed to help students repay their multiple education loans they have taken during studies. Most students land into deep debt and have problem managing various loans as well as face financial difficulties in making the monthly payments. The solution of these problem is student debt consolidation; here all your outstanding student loans are merged into one loan with just one payment to make every month. This new loan is offered at a lower and fixed rate of interest, lower monthly payments, various payment options and longer tenures.
Student loans consolidation offers various benefits. The rate of interest is lower than all your consolidation loans and thus you pay lower monthly payments. The interest rates are locked, therefore it is shielded from the inflation rates. The loans have a flexible repayment options and no fees, charges or penalties. Also there are no credit checks and co-signers required.
Your monthly payments could be lowered by around 54%. You typically have 10 years to repay your loans, but in student loans consolidation your tenure can be extended to up to 30 years.
You will have to be eligible to get the student federal loan consolidation. Some criteria to be fulfilled are, you must be in the six -month grace period after completing studies, after which the repayments start. The other case is that you have started paying the installments already. Then, your total loans outstanding must be at least $7500. You have taken loan from different lenders and you can consolidate your loan just once.
Which Loans Are Eligible:
There are also certain loans that can be consolidated under the student loans consolidation programs:
You can get these loans from any bank or financial institution which participates in the Federal Family Education Loan program. The student debt consolidation loan term and conditions should be verified with your lender. The interest rate offered is generally the same by all the lenders but some lenders also offer future discounts if your repayment record is good and also discounts if your monthly payment is to be debited directly from your bank account.
The whole process of student federal loan consolidation usually takes 30-45 days. It is the best way to manage your financial responsibilities after college. Your multiple loans will be turned into one loan with just one payment to make every month. The student loans consolidation will be convenient for you and because of the lower interest rates; it will be financially beneficial too.