Essential Student Loan Consolidation Rules And Regulations

When you want to consolidate your student loans, it is necessary to know the deal you are getting into. Just like any other financial decision, you need to carry out your homework before committing your signature. In fact, this is not a difficult process. However, there are several regulations and rules that you need to know before choosing to consolidate student loans. In this post, we share such important regulations and rules pertaining student loan consolidation. Ensure you understand the rules before going on with the process.

It is free

Getting student loan consolidation is free and you should not pay for consolidating. If lenders are charging you upfront fees, it is possible they are a scam. Fortunately, you can take your business somewhere else. This is what is known as “advance fee loan scam.” Moreover, it is quite common in the student loans industry.

Cannot consolidate while in college

You are allowed to consolidate student loans after they enter the grace period. This is usually, six months after graduation or getting out of school. It is possible to consolidate your loans even when repayment has started. It is advisable to do so before repayment begins. As much as it may not be beneficial to every person, it is worth considering by looking at the numbers and see whether you can save and manage your loans easily.

Students in your name

It is not possible to consolidate student loans that are not in your name. However, if you have your parent’s name on it, he or she can do it for you. Although parents and students can consolidate their student loans, they cannot do so in one program. They ought to be separate.

Any lender

Any form of the federal student loan may be consolidated. There is also an idea of reconsolidating. In this situation, you will have to add a loan, which you had not consolidated. You should note that most lenders require you to have a certain minimum balance.

Longer repayment terms

Usually, federal loans come with a 10-year repayment plan. By consolidating, you will be extending their terms to 30 years depending on the amount of money owed. It is advisable to pay off the loan as soon as possible.

You can pay your student loans anytime without risking prepayment penalties. When you pay it as soon as possible, you avoid unnecessary interest charges and you can relieve the financial burden as soon as possible.…