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Saturday, November 15, 2008

Ten Loan Consolidation Questions All Students Should Ask!

By David T. Lightcomb

No matter which college you attend, you can be sure of one thing and that is, they won't be able to teach you just how you should go about the process of consolidating student loans.

The good news however, is that you can simply by asking some questions. Here are 10 questions every student should ask:

1 - Why do you want to consolidate your student loans? The most common reasons for student loan consolidation are (1) to reduce the dollar amount of monthly payments, and (2) to ease repayment by turning many loans into one.

2 - When should you consolidate loans? If you feel you are no longer able to afford the all the individual repayments, or if you're struggling to deal with the financial stress from having so many obligations then it be advisable to consolidate.

3 - Am I eligible for student loan consolidation? Once you have graduated from college, your student loans will enter a grace period. This is generally when you will apply for your consolidation loan.

4 - What incentives do I get? Some borrowers offer bonuses when choosing them for student loan consolidation. Make sure you get all of the details about any incentives in writing.

5 - Does this lender have experience with student loan consolidation? Choosing one of the reputable student loan consolidation companies is essential to your peace of mind.

6 - Will this lender be servicing my loan? Some "lenders" are really brokers that get you to consolidate your student loans with them only to sell them off to a lender you did not choose. Be aware of this and ask about it before signing any loan agreement.

7 What loan do I get? Remember, if you're consolidating federal student loans, you will loose any federal government benefits you enjoy, if you choose to consolidate with a loan other than a federal student consolidation loan.

8 - What are the loan terms and conditions? Specific terms and conditions may vary from one lender to the next so most importantly, don't even consider signing anything unless you're 100% certain of the terms.

9 - What available features are there? Here again, the features offered will differ to some extent between lenders but in general, you can expect features such as online account management facilities and also various online applications. If uncertain, ask before agreeing to anything.

10 - What should I do if I can't pay my loan? Of course you don't want this to happen, but make sure you know the consequences just in case it does.

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