(1888PressRelease)
March 05, 2007 - College-Loan-Consolidation-Help.com was set up to provide useful information in relation to college loan consolidation to enable college graduates make informed choices.
When a person consolidates their college debt, they simply combine several of their student or parent loans together into one loan from a single lender. As a result, they end up with a single manageable monthly repayment instead of making several monthly repayments at once.
College loan consolidation programs are different from ordinary loans and bring with them a number of important benefits:
- The credit score will not be analysed
- There is no maximum amount available
- One could potentially postpone repayment
- Debts are forgiven at the death of all borrowers
- Interest paid on college loans could be tax deductible
The interest rate on a consolidation loan is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest 1/8 of a percent and capped at 8.25%.
Here is a typical example:
Jenny has $7,000 worth of Perkins Loans @ 5% and $13,000 worth of Stafford Loans @ 7.5%. When Jenny consolidates her loans into one, her weighted interest average rounded up to the nearest 1/8th of a percent becomes 6.63%. Here is the actual consolidation calculation: (7,000*5% +13,000*7.5%)/7,000+13,000.
When a borrower consolidates a number of loans with different interest rates, the consolidated interest rate is usually lower than the highest of their interest rates, but it is also higher than the lowest of their interest rates. In most cases, if one keeps to the same repayment schedule for their consolidated loan as was originally set out in their un-consolidated loans (e.g. 10 years), then the amount of interest they pay over the lifetime of the consolidated loan will be about the same.
That been said, there are a number of important benefits that college loan consolidation provides that makes it a very popular financial lending option for graduates.
To find out why, visit www.college-loan-consolidation-help.com - a new website launched to specifically guide college graduates and their borrowing parents through college loan consolidation.
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