Monday, March 17, 2008

Consolidating Federal Loans With Private Loans

When you are in school, borrowing money…you aren’t very concerned with where the money is coming from. You are more concerned with making sure your tuition is paid for every semester…some how, some way. What a lot of student do not realize is that loans that come from the Federal gov’t cannot be combined with private school loans when you graduate. Actually, to revise that a bit…they can be combined all together, if you pay off your Federal loans with a private loan…which is never something I would recommend. The whole point in taking out Federal loans is because they are better loans to owe than private loans…so what would that accomplish if you forfeited that Federal loan status, just so you had one monthly payment per month? You would end up paying MORE in the long run, and you would also lose many benefits that Federal loan carry…for example:

1) loan forgiveness should the borrower become deceased
2) the ability to consolidate at a FIXED interest rate
4) many deferment and forbearance options

So, if you are a college student borrowing both Federal and private school loans…keep in mind that when you are done with school…you cannot consolidate all these together. You will always have 2 monthly payments. You can consolidate all your private loans together…and all your federal loans together….but they will always remain 2 separate types of loans. For more information about both types of consolidation, you can visit: Student Loan Consolidator


Evan said...

Little but so much Helpful!
Life Style Rescue

keti said...

As many other employed people I also had several credits. It is better to have one concern than many, so I made the decision about restructuring of the credit. I used service to effectively cover my debts and pay significantly less every month. They will help you to find preferred payment schedule and interest fee.