November 16th, 2009
“Can I refinance a consolidated student loan?” is a common question for students who
have consolidated their student loans but are still having a hard time paying the
monthly payment. So, is it possible?
The answer for this question depends on whether your consolidated loan is a federal
consolidated loan or a private consolidated loan. In the case of a federal student loan,
your refinancing opportunities are limited.
You can only refinance your loan if you are adding new money to the federal loan, or you must be switching into the Direct Loan program in order to obtain public service loan forgiveness or a handful of other very limited circumstances. However, re-consolidating a federal consolidation loan does not relock the rates on the original loans. Rather, the interest rate on the new consolidation loan will be based on the current fixed rate of the old consolidation loan. It does not depend on your credit score.
Private consolidation loans have a variable interest rate that is based in part on your credit score. So if your credit score has improved significantly (minimum of 50 points, but ideally at least 100), you might be able to obtain a better interest rate on your private student loans by consolidating them. However, lenders have increased the interest rates on private loans by 2% to 4%, depending on credit scores.
It is more difficult to obtain a private student loan these days; a 700 FICO score might not be good enough. Also, a 6% rate on a private student loan would be among the best available, so you’d be unlikely to obtain a better rate on a refinance.
Federal loans cannot be consolidated into a private consolidation loan. Even if it’s possible, the interest rates on private loans are generally higher. Likewise, private student loans cannot be consolidated into federal consolidated loans.
I hope I was able to answer question, “Can I refinance a consolidated student loan?” I hope you’d be able to seek other options that could help lighten your financial load.
By: ghirly marie aquino
November 11th, 2009
As college going students, many of us do strive to save some amount of pocket money and try to find good paying summer jobs. These little savings could actually make a lot of difference, when it comes to loan payments.
Students can also take advantage of consolidation loans with low interest rates. To find loan companies offering lowest consolidation interest rates is not an easy task. But, with modern facilities like quality search engines, the Internet and advertising websites with ready loan quotes, you can actually get approved for a fabulous consolidation loan package with minimum interest rates.
Ways to Acquire Best Consolidation Student Loans
The best way to get a great student consolidation loan rate is by possessing good bank credit. It will be very easy to apply for consolidation loans with low interest rates, if you have a credit score rating of more than 660 points. For medium credit scorers, you can acquire best loan deals after detailed search on the Internet for minimum FICO needed, so that you can assess your credit score accordingly.
Being conscious of your credit rating is one good way to double your chances to get best student consolidation loan interest rates. Self-examination of bank statements and records is a wonderful habit to determine your loan worthiness as a student. Basically, if a student has a poor FICO score of less than 600, getting an affordable and cost effective student consolidation loan rate quote could be a problem.
Consolidation Loan Interest Rate for Student Loans
The major factor about student loans is that it is an investment that you make for your future life; it is not a useless expense. Consolidating all your student loans will be lot more convenient and easier for you to pay the monthly installments. For example, if you have 3 individual loans, then all 3 could be consolidated into one large loan. Hypothetically, all 3 will be regarded as paid and a single new loan will begin in their places. You could also save, if you get an offer of a lower rate due to good credit history.
There are numerous financial institutions in the market that offer cheap consolidation student loans. You can apply for fixed consolidation loan rate, which means that you shall be paying a fixed interest rate till the time you pay off the entire loan. Even if the economic status of the country changes, interest rates remain unchanged in case of a fixed interest rate loan.
But, banks or financial institutions can change the fixed interest rates under extreme conditions. Defaulters for one or more repayments could be forced to pay increased interest rates.
Loan application for adjustable student loan consolidation interest rate is also considered by many financial firms. This consolidation loan rate student would be very low, but is subject to change depending on the inflation rate of the country’s economic status.
By: Amber Smith