Student loan consolidation is a practical repayment tool that refinances your school loans into one loan, significantly reducing your monthly payment.
The interest rates for federal student loan consolidations:
1, Stafford Federal Loan
It is a low interest and long term loan with many benefits to the student. Interest may vary but there’s a limit to how much it can grow: 8.75 %. Interest is reviewed on July 1st every year, and it’s guaranteed by the federal government through the education department.
Stafford Federal Loan is the most popular and widespread loan type among students because the repayment conditions are quite flexible. The student somtimes can just pay a monthly with the minimum of USD 50.00, or students can choose a gradual installment increase.
There are many Stafford loans options for students:
1. Stafford Federal Loan Subsidized
Government will pay for the entire loan interest while the student is still studying.
Students don’t repay interest until six months after they finished or left university.
Students need to prove their economic need to obtain this kind of subsidy. They also need to have applied for a Pell grant beforehand, and they must be either an American citizen or a foreigner with a permanent residence permit.
2. Stafford Federal Loan Non-subsidized
Students may pay for the loan’s interest while they are studying. They can choose whether or not to defer interest repayment while studying.
If interest repayment is deferred, when students finish university they must repay the whole accumulated interest plus the pending capital, according to the conditions agreed when the loan was granted.
2, Federal Plus Loan for Parents (Parent Loan for Undergraduate Students)
Parents of students can apply for this type of loans which is covering the entire expense (tuition, administrative fees, books and material, accommodation and meals, transportation) for their children's first university study. Any other government financial aid will be discounted from the sum granted. They do not need to prove a situation of economic need, but the university selected may ask the student to apply for a federal loan in order to accept the student enrollment admission in the university. Parents need a good credit history and it will be checked that they haven’t unfulfilled repayment of other loans the past.
3, The interest rates and charges
4, Repayment
The interest rates for federal student loan consolidations:
1, Stafford Federal Loan
It is a low interest and long term loan with many benefits to the student. Interest may vary but there’s a limit to how much it can grow: 8.75 %. Interest is reviewed on July 1st every year, and it’s guaranteed by the federal government through the education department.
Stafford Federal Loan is the most popular and widespread loan type among students because the repayment conditions are quite flexible. The student somtimes can just pay a monthly with the minimum of USD 50.00, or students can choose a gradual installment increase.
There are many Stafford loans options for students:
1. Stafford Federal Loan Subsidized
Government will pay for the entire loan interest while the student is still studying.
Students don’t repay interest until six months after they finished or left university.
Students need to prove their economic need to obtain this kind of subsidy. They also need to have applied for a Pell grant beforehand, and they must be either an American citizen or a foreigner with a permanent residence permit.
2. Stafford Federal Loan Non-subsidized
Students may pay for the loan’s interest while they are studying. They can choose whether or not to defer interest repayment while studying.
If interest repayment is deferred, when students finish university they must repay the whole accumulated interest plus the pending capital, according to the conditions agreed when the loan was granted.
2, Federal Plus Loan for Parents (Parent Loan for Undergraduate Students)
Parents of students can apply for this type of loans which is covering the entire expense (tuition, administrative fees, books and material, accommodation and meals, transportation) for their children's first university study. Any other government financial aid will be discounted from the sum granted. They do not need to prove a situation of economic need, but the university selected may ask the student to apply for a federal loan in order to accept the student enrollment admission in the university. Parents need a good credit history and it will be checked that they haven’t unfulfilled repayment of other loans the past.
3, The interest rates and charges
- Interest rates are variable but they can’t reach over 9 %. Rates are reviewed on July 1st every year.
- The federal government will apply an initial charge of 3 % and the lender granting the loan may charge up to 1 %.
- Both charges will be automatically deducted from the sum actually transferred to the borrower.
4, Repayment
- You start repaying 60 days after the loan has been obtained. Paid interests may qualify for tax benefits.
- Usually people choose a fixed monthly installment, the minimum being USD 50.00.
- Loans can be issued by financial institutions or directly by the government
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