Education Loans Federal Credit Union

For many students, funding a higher education can seem like a daunting task. Federal Loans are a great option for paying for school, but they don't always cover the total cost of your education. When federal student loans fall short of covering all of your higher education expenses, a private student loan is an option to supplement your other forms of financial aid.

With a UFCU Private Student Loans, students can borrow up to $15,000 annually to cover the cost of school, and payments are deferred while you are in school at least half-time. For more information about the private student loan application process,

Loan Features :

• No Origination Fee
• No Repayment Fee
• No Insurance Fee
• 25% interest rate reduction with automatic payments
• Fixed and Variable interest rate options
• .25% interest rate reduction after 48 consecutive on-time payments
• Several repayment options including deferred payments while in school
• 6-month grace period before repayment begins
• 10 year repayment term after graduation

Interest Rates :

Interest rates vary based on the creditworthiness or the borrower and cosigner, if applicable. You can more learn here. https://www.ufcu.org/accounts/loans/education/

Federal Education Student Loan Consolidation

When you consolidate your federal student loans, you combine multiple loans into one new student loan. Federal student loan consolidation centralizes all of your federal student loan payments so you submit one monthly payment to a single servicer.

Currently, the Department of Education offers two federal student loan consolidation programs. Here is what you need to know about each of them:

Federal Student Loan Consolidation Programs

Federa student loans	Direct Consolidation Loan	Special Direct Consolidation Loan
What is the purpose of this program?	A Direct Consolidation Loan combines multiple federal student loans into a single loan with one new fixed interest rate. It also extends your repayment period, which results in a lower monthly payment.	The Special Direct Consolidation Loan Program ensures that all of your federal student loans are processed by the same loan servicer, making it easier for you to manage your federal student loan debt.
What are the eligibility criteria?	To qualify for a Direct Consolidation Loan, you must have at least one Direct Loan or at least one federal student loan originated by a private lender (such as a bank) that is in grace, deferment, repayment or default status. Federal student loans eligible for consolidation include Perkins Loans, Stafford Loans and PLUS Loans.	To qualify for this special offer, you must have at least one student loan owned and serviced by the Department of Education and at least one federal student loan originated by a private lender such as a bank and serviced by that lender or another entity servicing on the lender's behalf. While you are required to have both types of loans, only your federal student loans originated by a private lender that are in grace, deferment, repayment or forbearance status are eligible for consolidation under this program. Federal student loans eligible for consolidation include Stafford Loans, PLUS Loans and FFEL Consolidation Loans.
How is my interest rate calculated?	The interest rate reflects the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest one-eighth of one percent. The interest rate is fixed for the life of the loan and cannot exceed 8.25%.	Each federal student loan originated by a private lender (such as a bank) that is brought under this program will have its own fixed interest rate and repayment period. A 0.25% interest rate reduction will be applied to the current rate on each of your federal student loans originated by a private lender that are being consolidated. The interest rate is fixed for the life of the loan and cannot exceed 8.25%.
What is the repayment period?	Depending on your total federal student loan balance being consolidated, you have up to 30 years to repay your new federal consolidation loan. Total Loan Debt---Repayment Period Less than $7,500---10 years $7,500 to $9,999---12 years $10,000 to $19,999---15 years $20,000 to $39,999---20 years $40,000 to $59,99---25 years $60,000 or more---30 years	Your repayment period remains the same as your current repayment period for each loan that is being consolidated and will not be reset.
What are the financial benefits of consolidating?	When you extend your repayment period, you will have lower monthly payments so you can afford the things you need now. Keep in mind that a longer repayment period increases the amount you will pay over the life of the loan since more interest will accrue during a longer repayment period.	Since your repayment period is not being reset, you will pay less interest over the life of the loan than you would with a traditional Direct Consolidation Loan.
Are repayment plans available?	Yes. You can choose from a variety of repayment plans.
Are there any borrower benefits?	Yes. You may be eligible for a 0.25% interest rate reduction when you repay through the Department of Education's automatic debit system.
Can my consolidation loan be forgiven?	Yes. You may qualify for a Public Service Loan Forgiveness Program if you meet the additional program requirements.
How do I apply?	You have several options. Department of Education for details.	A Department of Education loan servicer will notify you if you are eligible to take advantage of this program.
Where can I get more information?	Visit the Direct Consolidation Loan website for more information.	Visit the Special Direct Consolidation Loan website for more information.

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Private Education Student Loan Information

If you have educational expenses that can't be met through other sources of financial aid such as scholarships, grants, or federal educational loans, a private education loan, sometimes called "alternative loan", may be an option. A private education loan is a consumer loan offered by banks, lending companies, and other private entities to an individual for the purpose of paying college expenses. Before applying for a private loan, make sure you take advantage of any free money available to you, such as scholarships or grants, and federally guaranteed student loans which provide a lower cost financing solution.

Graceland University does not recommend or endorse any private loan lender. Web searches for private education loans typically provide multiple loan options. You must select your private loan lender; the financial aid office cannot do it for you.

The entire private alternative loan process can take up to six weeks--two weeks for the student to obtain and complete the application, two weeks for the school to certify the application, and two weeks for the lender to send the loan funds to the University and for the University to process the funds.

Items to consider when selecting a private (alternative) education loan

Borrower Eligibility

• What are the requirements for borrower eligibility including the underwriting criteria for the loan?
• What are the qualifications for a student borrower to receive a loan without a co-signer?

Repayment Terms

• What are the terms for repayment? Look for a calculator or a chart that estimates monthly payment.
• Are there any loan deferment or forbearance options?
• Is there interest deferment, such as while attending school?
• What fees are there and how are the charged: upfront, reduction of disbursement, added at repayment?
• What are the minimum and maximum loan repayment amounts? What is the aggregate maximum for the loan?

Borrower Benefits

• Are there any borrower benefits?
• How are borrower benefits earned?
• What percentage of borrowers actually earns the benefits?

Interest Rates

• How is the interest rate determined?
• How often is accrued interest capitalized to the loan?
• Fixed or variable rate? For variable rates:

• What was the annual percentage rate (APR) for the prior calendar year?
• Is the current rate expected to be similar to prior year?
• Does the interest rate include a floor or ceiling? What are they?

Other Considerations

• Are there provisions to release the co-signer?
• Are private loan consolidations available by the lender?
• How much is the origination fee on the loan?

You should carefully evaluate a private education loan product before accepting any loan proceeds. That includes reading, and absorbing, the terms of the private education loan promissory note and all disclosures that the private education loan provider sends to you.

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Education Student Loans Top Tips for Recent Graduates
Tips for Education Student Loans Consolidation

Government Education Student Loans

Many students rely on federal government student loans to finance their education. These loans generally have low interest rates and some do not even require credit checks or collateral. Government loans also provide a variety of deferment options and extended repayment terms.

In terms of available loan programs, the following information provides a background on government loans as well as an overview of additional programs that are offered by the Student Loan Network.

What are Government Education Student Loans?

These loans supply financial help for students enrolled at a school that participates in federal aid programs. When referring to a "school," this means a two-year or four-year public or private college, university, or trade school. The Federal Direct Student Loan Program (FDLP) originates and maintains all government student loans created after June 30, 2009. If you received a federal loan prior to July 1, 2010, it may be a result of the Federal Family Education Loan Program (FFELP) and require direct loan consolidation.

What is a Stafford Loan?

Stafford Loans are federal student loans made directly available to college and university students and are used to supplement personal and family resources, scholarships, grants, and work-study. They may be subsidized by the U.S. Government or may be unsubsidized, depending on the student's financial need.

A subsidized federal loan is when the government pays the loan's interest while you're in school while an unsubsidized government student loan requires you to pay all the interest, although you can have the payments deferred until after graduation. To receive a subsidized Stafford Loan, you must be able to demonstrate financial need. About 2/3 of subsidized Stafford Loans are awarded to students with family adjusted gross income (AGI) of under $50,000, 1/4 to students with family AGI of $50,000 to $100,000, and a little less than 10% to students with family AGI over $100,000.

The limit for the academic year beginning in 2010 is $3,500 per year for freshman undergraduate students, $4,500 for sophomore undergrads, and $5,500 per year for junior, senior and 5th year undergrads. Dependent students may also be eligible to receive an additional $2,000 per year in a unsubsidized Stafford loan. Government student loans for graduate students have higher limits: $8,500 for subsidized Stafford and $12,500 per year for the unsubsidized Stafford. Many students also take advantage of the Perkins Loan. For graduate students, the limit for Perkins Loans is $6,000 per year.

Stafford and Other Federal Loans Listed Below

• Federal Stafford Loan
• Parent PLUS Loan
• Graduate PLUS Loan
• Perkins Loan

Find college scholarships

There is nothing better than money you do not have to pay back. Visit Student Scholarship Search for more information on a wide variety of college scholarship opportunities. Last year, there was over $31 billion in unmet financial need. Don't let yourself be one of the students who didn't get all the financial aid you could.

Parent PLUS Loan

The Parent PLUS Loan is offered to parents of students enrolled at least half time in a program included within a set list of participating post-secondary institutions. PLUS Loans are also available for graduate and professional students. This type of government student loan differs from Stafford and Perkins Loans because it can cover a larger amount of the education's costs, has a higher interest rate and the commitment is undertaken by the parent, instead of the student.

Graduate PLUS Loan

This Graduate PLUS Loan is similar to the Parent PLUS Loan as it is an unsubsidized federally guaranteed loan up to the cost of education.This loan is taken out by the graduate student using their own signature and credit rating. It has the same federal loan deferment and forbearance options as the Stafford Loan, so graduate and professional students can postpone repaying their government student loans while enrolled at least half-time in a degree or certificate program.

Federal Education Student Loans Consolidation

If a student has a series of loans, through the Stafford, PLUS or Perkins programs, they have the option to consolidate government student loans into one single payment. This results in reduced monthly repayments and a longer term for the loan. The term of the loan can be between 10-30 years. Although the monthly repayments are lower, the total amount paid over the term of the loan is higher than would be paid with other loans.

5 Tips to Scale Back Education Student Loans Payments

President Obama announced his plan to help borrowers inundated with student loan debt today, which coincided with the release of a new report from the College Board that showed how higher education had become even more expensive.

The College Board found that the average in-state tuition and fees at four-year public colleges rose 8.3 percent this year. Tuition rose more than 4 percent at private colleges -- all at a time when student borrowers and college grads struggle to keep up with payments in a weak economy that holds even weaker job prospects.

The president's plan includes capping federal loan payments at 10 percent of borrowers' discretionary income -- that limit is set at 15 percent now -- making loans forgivable after 20 years instead of 25, and provides the opportunity to reduce some federal loan interest payments. The administration said it would give students the opportunity to consolidate their Federal Family Education Loans with their Direct Loans and reduce the interest rate for those who do that by half a percent.

The president said the plan could help up to 6 million borrowers -- which is just a fraction of the 36 million saddled with student loans across the country. Here are some tips from several industry watchdogs, including Lauren Asher, president of the Institute for College Access and Success and its project on student debt, to help you navigate the best solution:

1. Know Your Education Loans : There is a huge difference between federal and private student loans. Federal loans, according to Asher, offer a lot of options for staying out of default and keeping payments manageable, while private loans can leave borrowers at the mercy of their lenders.

"They don't come with the repayment plans, forgiveness options and other things that come guaranteed with federal student loans," she said.

Those not sure about what kind of loan they have can visit www.nslds.ed.gov to view the loan amounts, lenders and repayment status for all the federal loans. If a loan isn't listed, it's probably private.

2. Know Your Grace Period : All loans have varying grace periods. It's six months for federal Stafford and federal Family Education loans, nine months for federal Perkins loans, depending on when they were issued, according to the Project on Student Debt. It's also extremely important not to miss the first payment.

3. Tax Deduction: All borrowers should take advantage of the student loan interest tax deduction, an above-the-line exclusion on a federal tax return of up to $2,500 in student loan interest. You can claim the deduction even if you don't itemize your taxes.

4. Take Advantage of Automated Payments: Many lenders offer a small reduction in interest rates if borrowers sign up for automatic monthly payments.

There are also several options for many people who borrow, specifically with government loans. While many look for a long-term fix for bringing down the balance of their loans, the government, and some private lenders, offer short-term solutions to lower monthly payments.

5. Consolidation: Consolidating is similar to refinancing a loan, and allows borrowers to combine several (or one) loan into one payment -- the interest rate is an average of the interest rates on all the loans. Consolidating will usually lower the monthly payment but isn't always a great idea, as it often extends the life of the loan and can result in more interest paid throughout its life. If you are close to paying your loans off -- you may want to steer clear.

Education Student Loan Interest Rates - Likely to Go Up With New Market-Based System

The House has approved legislation on student loan interest rates to switch to a more market-based system. With a threat of veto from President Obama and a looming July 1 deadline before the rates double from 3.4% to 6.8%, the interest rate debate is sure to heat up these coming weeks.

But now, I must ask: does the rest of the world have the same problem?

In a report published by the Consumer Financial Protection Bureau earlier this month, it found, “Between 2007 and 2010, the average student loan balance for households with student debt climbed by nearly 15%.” This is why policymakers such as Sen. Elizabeth Warren (D-MA), Rep. John Kline (R-Minn.), Sen. Majority Leader Harry Reid (D-Nev.) as well as others are pushing forward their own proposals to fix this problem.

We all know that student debt has been a growing problem in the U.S., but you would think that the U.S. would have at least the academic credentials to show for our expensive efforts. Yet the U.S. is still lagging behind in educational performance compared to many other developed nations. The US came in at #17 for cognitive skills and educational attainment while Finland, Japan, the U.K., Canada and Germany all ranked higher in the 2012 report developed by the Economic Intelligence Unit.

Let’s look at some of these high-ranking education systems:

1 Finland

Finnish students do not pay tuition fees for higher education. Students are responsible for their own personal expenses and housing, of which the government offers financial aid for lower income families unable to pay for these necessities. Interest rate assistance is available to those who need it, however; as of February 2013, the average interest rate on student loans was 1.6% according to the Bank of Finland.

4 Japan

Education costs, including institutional and student living expenses, can be as low as $11,107 at public institutions and as high as $15,434 at private institutions in Japan. Under the Independent Administrative Institution, Japan Student Services Organization (JASSO), there are two types of student loans. One has a zero rate of interest while the other has a prime interest rate, which according to the Bank of Japan has not risen over 3% in the last thirteen years.

6 United Kingdom

A 2010 higher education rankings report by the Higher Education Strategy Associates estimated $5,288 for education costs in England and Wales. On the other hand, the Telegraph reported earlier this year that most top U.K. universities are now charging 9,000 pounds or almost $14,000 for tuition. Starting from September 2012, the interest rate for existing income contingent repayment loans is set at 1.5%.

10 Canada

An undergraduate tuition fee for all Canadian students is about $5,581 for the 2012-2013 academic year. Canada has a similar system to that of the U.S. in terms of interest rates. Canadian students pay no interest on their loans until they finish their studies when the rate jumps significantly. They pay a fixed interest rate plus 5% or a floating rate plus 2.5%. However, “one quarter of a billion dollars is spent annually by various provinces and the Canada Millennium Scholarship Foundation to reduce debt at the end of the period of studies.” One tenth of all debt incurred by Canadian students is forgiven this way, according to an Educational Policy Institute report.

15 Germany

Germany has always been a country of free public higher education until recent economic constraints have led seven of the sixteen German states to introduce fees. Even still, the average fee is about $1,300 per year. Although the tuition is low, student loans are still given at a zero percent interest rate and “the value of the loan stays constant in nominal terms.” Germany also has a threefold program of debt remission, which is based on need, merit and completion.

While there is not one perfect education system in this world, it seems that other countries are trying to create more supportive systems of realistic repayment options for students and their families. Even Nobel Prize winning economist Joseph Stiglitz warns that we could fail behind other industrialized nations.

The Center for American Progress laid out a comprehensive analysis of the proposed legislation on student loan interest rates. The investigation by David A. Bergeron and Tobin Van Ostern stresses the importance of a long-term plan that takes advantage of historically low interest rates, but also includes a cap to protect students from higher rates in the future. Hopefully, Congress can think of a solution like that before July 1 or it’s going to be a very depressing Independence Day for 38 million student loan borrowers.

Education Student Loans Top Tips for Recent Graduates

Whether you just graduated, are taking a break from school, or have already started repaying your student loans, these tips will help you keep your student loan debt under control. That means avoiding fees and extra interest costs, keeping your payments affordable, and protecting your credit rating. If you're having trouble finding a job or keeping up with your payments, there's important information and tips here for you Loans, too.

1. Know Your Education Student Loans: It's important to keep track of the lender, balance, and repayment status for each of your student loans. These details determine your options for loan repayment and forgiveness. If you're not sure, ask your lender or visit www.nslds.ed.gov. You can log in and see the loan amounts, lender(s), and repayment status for all of your federal loans. If some of your loans aren't listed, they're probably private (non-federal) loans. For those, try to find a recent billing statement and/or the original paperwork that you signed. Contact your school if you can't locate any records.

2. Know Your Grace Period: Different loans have different grace periods. A grace period is how long you can wait after leaving school before you have to make your first payment. It's six months for federal Stafford loans, but nine months for federal Perkins loans. For federal PLUS loans, it depends on when they were issued (see details). The grace periods for private student loans vary, so consult your paperwork or contact your lender to find out. Don't miss your first payment!

3. Stay in Touch with Your Lender: Whenever you move or change your phone number or email address, tell your lender right away. If your lender needs to contact you and your information isn't current, it can end up costing you a bundle. Open and read every piece of mail - paper or electronic - that you receive about your student loans. If you're getting unwanted calls from your lender or a collection agency, don't stick your head in the sand - talk to your lender! Lenders are supposed to work with borrowers to resolve problems, and collection agencies have to follow certain rules. Ignoring bills or serious problems can lead to default, which has severe, long-term consequences.

4. Pick the Right Repayment Option: When your federal loans come due, your loan payments will automatically be based on a standard 10-year repayment plan. If the standard payment is going to be hard for you to cover, there are other options, and you can change plans down the line if you want or need to. Extending your repayment period beyond 10 years can lower your monthly payments, but you'll end up paying more interest - often a lot more - over the life of the loan. Some important options for student loan borrowers are income-driven repayment plans such as Income-Based Repayment and Pay As You Earn which cap your monthly payments at a reasonable percentage of your income each year, and forgive any debt remaining after no more than 25 years (depending on the plan) of affordable payments. Forgiveness may be available after just 10 years of these payments for borrowers in the public and nonprofit sectors. To find out more about Income-Based Repayment and related programs and how they might work for you, visit IBRinfo.org.

Private loans are not eligible for IBR or the other federal loan payment plans, deferments, forbearances, or forgiveness programs. However, the lender may offer some type of forbearance, typically for a fee, or you may be able to make interest-only payments for some period of time. Read your original private loan paperwork carefully and then talk to the lender about what repayment options you may have.

5. Don't Panic: If you're having trouble making payments because of unemployment, health problems, or other unexpected financial challenges, remember that you have options for managing your federal student loans. There are legitimate ways to temporarily postpone your federal loan payments, such as deferments and forbearance. For example, an unemployment deferment might be the right choice for you if you're having trouble finding work right now. But beware: interest accrues on all types of loans during forbearances, and on some types of loans during deferment, increasing your total debt, so ask your lender about making interest-only payments if you can afford it.

If you expect your income to be lower than you'd hoped for more than a few months, check out Income-Based Repayment. Your required payment in IBR can be as little as $0 when your income is very low. See tip 4 for more about IBR and other repayment options.

6. Stay out of Trouble! Ignoring your student loans has serious consequences that can last a lifetime. Not paying can lead to delinquency and default. For federal loans, default kicks in after nine months of non-payment. When you default, your total loan balance becomes due, your credit score is ruined, the total amount you owe increases dramatically, and the government can garnish your wages and seize your tax refunds if you default on a federal loan. For private loans, default can happen much more quickly and can put anyone who co-signed for your loan at risk as well. Talk to your lender right away if you're in danger of default. You can also find helpful information at studentloanborrowerassistance.org.

7. Lower Your Principal If You Can: When you make a federal student loan payment, it covers any late fees first, then interest, and finally the principal. If you can afford to pay more than your required monthly payment - every time or now and then - you can lower your principal, which reduces the amount of interest you have to pay over the life of the loan. Include a written request to your lender to make sure that the extra amount is applied to your principal! Otherwise it will automatically be applied to future payments instead. Keep copies for your records and check back to be sure the overpayment was applied correctly.

8. Pay Off the Most Expensive LoansFirst: If you're considering paying off one or more of your loans ahead of schedule, or trying to reduce the principal, start with the one that has the highest interest rate. If you have private loans in addition to federal loans, start with your private loans, since they almost always have higher interest rates and lack the flexible repayment options and other protections of federal loans.

9. To Consolidate or Not to Consolidate: A consolidation loan combines multiple loans into one for a single monthly payment and one fixed interest rate. If this is appealing, here are some pros and cons to consider. You can consolidate your federal student loans through the Direct Loan program, and this calculator can help you figure out what your interest rate would be. For private consolidation loans, shop around carefully for a low or fixed interest rate if you can find one, and read all the fine print. Never consolidate federal loans into a private student loan, or you'll lose all the repayment options and borrower benefits - like unemployment deferments and loan forgiveness programs - that come with federal loans!

10. Education Student Loan Forgiveness: There are various programs that will forgive all or some of your federal student loans if you work in certain fields or for certain types of employers. Public Service Loan Forgiveness is a federal program that forgives any student debt remaining after 10 years of qualifying payments for people in government, nonprofit, and other public service jobs. Find out more at IBRinfo.org. There are other federal loan forgiveness options available for teachers, nurses, AmeriCorps and PeaceCorps volunteers, and other professions, as well as some state, school, and private programs (see some examples).

Tips for Education Student Loans Consolidation

To overcome the financial expenses for management studies (MBA) many nationalized and private banks offer various types of education loans. Although it is not easy to figure out the best scheme among so many options, applicants can clarify few basic things before deciding on one. CoolAvenues has come up with some guidelines for you to help you select the best scheme out of the lot.

Understand the loan. Before applying for education loan it is very important to understand the student/course eligibility criteria and the aspects, which the loan covers to complete the education. Eligibility criteria for students demand him to be an Indian national and loans are granted to pursue graduation courses (B.A., B.Sc. etc.), post-graduation courses (MBA, PHD etc.), professional courses (Engineering, Medical etc.) and various other types of courses. Besides tuition fee of the course the loan covers all the expenses payable to college viz. examination/hostel/library fee, purchase of books/equipments, caution/refundable deposits, insurance cover, travel expenses/passage money for studies abroad and other expenses required to complete the course.

Be confident for targeted college Consider it as mandatory to be sure about the standing of the college you are planning to join. You must check out the history of performance regarding placements of the concerned college, in case, it is not a very renowned institute, and you have to be very realistic in approach while joining because if you don’t achieve good financial standing after completion of the course, the debt will convert to an unsustainable burden.

First exhaust all of your other resources It’s important for you to borrow only as much as you actually need, so your loan amount can be as less as possible. Do not apply for full amount in haste. First try to collect all of your possible resources then find out how much more is required. This will help you to keep your principal and interest amount lower and you will gain the benefit of this exercise while repayment process.

Consider the advantages and disadvantages of loan Undoubtedly education loan helps in paving way to successful educational qualification and financial independence, but only if chosen and applied wisely. There is a darker side of the loan also, which, generally, is not visible to the loaner while applying for the loan. Disadvantages of the loan, if not considered in the beginning only, can lead the borrower to a traumatic situation during repayment. It is advisable to go through the disclosures again and again until all the terms and conditions become transparent to borrower.

Study all the available options Before applying for the loan shop around and enquire about all the schemes available in the market. Some bank may be offering you better interest rate but on the other hand the same bank may be charging additional processing fee, whereas bank offering higher interest rate may not be charging any processing fee and ultimately you will be supposed to pay back nearly same amount to both the banks. In such case your attention needs to be diverted to other value added services offered by the bank. So do not hurry, do your homework, compare all the details, go in depth of the scheme then choose for the best suitable option.

Confirm about the grace period Different loans have different grace periods i.e. how long you can wait after leaving school before you have to make your first payment. Make yourself aware with the grace period very clearly because you must start repayment as scheduled or else bank will start imposing delayed payment charges and in worst cases loan can go for default also. Also check with the bank authorities on the possible flexibility by bank for further deferment of loan in case you are not able to start repayment on scheduled time. You must be left with some scope of postponement of repayment process in order to avoid extra charges and other troubles.

Pick up the right repayment option if available- Few of the banks provide the facility to choose options for repayment. Consider all the possible factors that can affect payment schedule and then decide on the scheme as well as repayment option.

Know the repayment process- The borrower must be completely aware of different ways to pay back the loan. Cautiously decide on payment process viz. payment through check, payment directly to same bank or payment through some other bank, as banks apply different service charges for different modes of payment. Remember, if you start with the job abroad, you will not be present physically to pay back. For such instances familiarity with different procedures of repayment is must.

Be sure about work-outs and cancellations – The most important task in entire loaning process is to work-out the actual loan amount i.e. calculation of interest rate/E.M.I/processing fee and calculation of other extra charges. Usually while opting for the loan applicants concentrate only on principal and interest to reach repayment amount, whereas borrower has to pay many other charges, which are generally underestimated or not clarified by bank authorities. In rare cases due to some unavoidable circumstances borrower is forced to cancel the loan. Although the knowledge of cancellation procedure is never useful to majority of the candidates but, considering the worst situation in mind, it is in your favor if you confirm the procedure with bank while applying for the loan itself.

Aware of Pre-payment fees of loan – It is always better to get rid of the debts as soon as possible but banks impose extra charges for pre-closure of the loan. Some percentage of outstanding balance is charged incase of loan takeover. If the bank allows and you can afford to pay more if not full, then pay off. This way you can lower your principle, which in turn will lower your amount of interest also.

Ask questions- Ask as many questions from bank authorities as you want. Never hesitate to clarify your doubts because today’s doubts can prove to be very troublesome tomorrow. Few sample questions to ask about student loan are mentioned below:>

• What is the lowest interest rate and fee combination that you can offer?
• Is the rate applicable to only a limited period (an introductory rate), or for the entire duration of the loan?
• What are the fixed and floating interest rates?
• Is there any penalty on paying off loan early?
• When will I have to start repayment?
• Can bank provide some extra time to start with repayment if required?

Stay in touch with your bank- After borrowing the loan keep in touch with lending bank continuously. Always keep a track of paid amount and leftover amount. If you have opted for floating interest rates you should always be updated with current interest rate and ongoing trend of market.

Learn About Education Student Loan Consolidation

Know the benefits and considerations of combining multiple loans into one.

If you borrow a number of student loans while you're in school, you might have trouble keeping up with all the payments when it comes time to start paying back your loans. Consolidating your loans might help.

Under the Federal Direct Loan Program, a Direct Consolidation loan lets you combine loans you obtained from one or more lenders, and/or several different federal programs, into one new loan.

Before deciding to consolidate your loans, get the information you need and consider your particular situation. After weighing the benefits of loan consolidation, as well as important considerations, you can make an informed decision about whether or not it is the right repayment option for you.

Understand the timing of when you can consolidate.

You can consolidate while you are in your grace period (the six months after you leave school before you start making payments), or in repayment (including during periods of deferment or forbearance).

• Benefit : You may receive a lower Direct Consolidation loan interest rate if you are consolidating variable-rate Stafford loans (disbursed before July 1, 2006) while you are in your grace period or in a period of deferment.
• Consideration : No matter what loans you are consolidating, if you consolidate while you are still in your grace period , you forfeit any remaining grace period and have to begin making payments on your Direct Consolidation loan within 60 days.

When it is advantageous for you to do so, try to consolidate toward the end of your grace period. Talk to the Direct Loan Servicing Center about the timing that works best for you.

By consolidating your federal education loans, you can extend your repayment period from 10 to up to 30 years.

Depending on your total education loan debt, you may be eligible for a repayment period of up to 30 years on your Direct Consolidation loan

• Benefit : Paying your debt over a longer period of time means lower monthly payments. If you are unable to make your scheduled monthly payment on your current loans, this may be a good option for you.
• Consideration : Extending the repayment term means you'll pay more interest over the life of your Direct Consolidation loan. So you'll actually wind up paying more for your loan in the long run.

If you consolidate your loans, the best strategy is to request the shortest repayment period that you are allowed and can afford. This will enable you to pay off your loan more quickly and save more interest. And remember, there is no penalty for making prepayments on your Direct Consolidation loan.

Consolidation gives you one payment with one lender.

The Department of Education (ED) will be the only lender of your federal student loans.

• Benefit : If you consolidate all of your student loans, you will make your monthly payment to only one lender - less paperwork, less hassle.
• Consideration : You may give up some benefits that your lender currently provides on your loans (i.e., interest rate reduction, auto debit incentive, etc.).

4 Reasons Education to Consolidate Your Student Loans

Consolidation is like refinancing—you get a new loan, the new loan pays off your old loans, and you pay the new consolidation loan instead. Why bother? Below are some important FAQs on this subject:

Which loans can I consolidate? You can consolidate pretty much all kinds of federal student loans like Subsidized and Unsubsidized Stafford Loans, PLUS Loans, and Perkins Loans, including most federal loans in default. But be careful—defaulted Direct Consolidation Loans can't be reconsolidated, so you only get one chance to use consolidation to get out of default.

When does consolidation make sense? Consolidation might make sense if :

1. You want to combine your federal loans and make just one monthly payment.

2. You want to lock in a fixed interest rate on variable interest rate loans

3. You need a way out of default

4. You have Federal Family Education Loans, or FFEL (federal loans from a bank or private lender like Sallie Mae) and you want those federal student loans to be eligible for Public Service Loan Forgiveness (since only Direct Loans are eligible).

What are the downsides to consolidation? It's important to understand the potential disadvantages to consolidation. For instance, you'll have the option of taking longer to repay, so a consolidation loan could cost you more over time (since interest keeps adding up until you're done). If you consolidate while you are in school—currently allowed under limited circumstances—you'll lose your grace period. In addition, if you're close to paying off your loans, consolidation might not be worth the effort.

How can consolidation get me out of default? If you're in default on your student loans, you can't get new loans to go back to school, and you face severe collection procedures. Consolidation can give you a fresh start. You can consolidate defaulted student loans into a Direct Consolidation Loan and stop collections including garnishments and tax intercepts. Be aware that if you are in default, your balance will go up after you consolidate, because collection fees will be added to the loan.

Can I consolidate my private student loans into a Direct Consolidation Loan? I wish. Unfortunately, private loans are not eligible for consolidation into a Direct Consolidation Loan. And, for Pete's sake, beware of consolidating federal loans into a private consolidation loan. Federal loans have important borrower protections that you lose if you choose to consolidate federal loans with a private lender. Also, federal consolidation loans generally have lower interest rates. Only Direct Loans offer federal consolidation loans these days.

How do I apply for a Direct Consolidation Loan? You can apply online for a Direct Consolidation Loan. Direct consolidation loan applications submitted online are processed more quickly than those submitted by mail. Be sure you include the right information about the loans you are consolidating. You'll need to know the balances of all your loans to complete the application. If you make mistakes on the application, it will probably delay processing.