|
| Loan Consolidation |
 The PLUS Loan – Ideal for Consolidation
The PLUS loan is another loan with changeable interest rate. Current government interest rates determine it. PLUS loans generally have a higher interest rate than Stafford Loans so when rates enlarge the interest payments are even more essential.
Until July 1st 2006, PLUS loans were only for parents. It cannot be consolidated with the student’s loan because the loan is written in the parent’s name. But multiple PLUS loans can be combined when consolidating student loans. Changes in 2006 allow graduate students to take out PLUS loans in their own names.
HPSL Loan – Ask questions about deferment before consolidating
The HPSL (Health Professions Student Loan), like the Perkins Loan, has a fixed rate of interest. The HPSL loan also has some deferment benefits that consolidating student loans could remove.
The HPSL loan is intended to meet the needs of those in the health care industry. The loan allows the borrower to delay payments for the first 3 years after graduation while in residency. If you have an HPSL loan, contact the lender you are considering to find out if your deferment options will remain after consolidating student loans.
Direct Loans – Ideal for consolidation
If you got the balance of your student loan check directly from your school’s financial aid office, then your school most likely participates in the Direct Loan program. If this is the case, consolidating student loans must first be done through the Direct Loan program before shopping around for your choice of student loan refinancing lender.
Before July 1st 2006, borrowers had the option to shop around for a lender when comparing options for consolidating student loans. After July 1st, Direct Loan borrowers face more restrictions when it comes to selecting a lender. Borrowers will now only have the freedom to switch lenders in cases where the Direct Loans refinance lender does not provide an income-sensitive repayment option.
Most student loans are Stafford loans and are ideal for consolidating. Student loans all have their own unique characteristics and advantages.
|
|
