The advantage of any college loan is that there is no payment liability during the tenure of undergoing the course of higher education to obtain the choice certificate and then seek the right job to settle down in life. It is the first step towards fulfilling an ambition or a dream.
Some students are compelled to even draw loans from more than one source so as to meet financial requirements that go beyond plain coaching classes. The realization hits after completion of the studies, when that debt is now due for repayment and it becomes more difficult when juggling two or more loans with varying payment schedules while running around seeking the chosen career path. This is when most opt for the Student Loan Consolidation scheme through a government or a private agency provided they are able to fulfill the eligibility criteria for the process of college loan consolidation. It is important for the students to review all the options before finalizing on any particular scheme.
As mentioned already, the Higher Education Reconciliation Act of 2005 has defined the eligibility criteria for student loan consolidation, stating clearly that the process should commence only after graduation or are mid-way towards graduation. The process is modified and would slightly differ for loan borrowers wanting to avail the consolidation through FFEL or through Direct Stafford. For PLUS loan borrowers, the Student Debt Consolidation Loan eligibility begins as soon as the full disbursement has been done. And the private consolidation parties are not governed by this notification. It should be understood that the facility of preliminary loan sanction and later the debt consolidation facility is applicable to only those persons having valid U.S citizenship or be a permanent resident.
As a thumb rule, generally the minimum loan amount is U.S $10,000 while the maximum amount that can be borrowed is U.S $250,000, depending on meeting the criteria for the loans. For each loan, and depending on the source, the repayment period for student loan refinance is also varied. Generally, an amount below U.S $40,000 is repayable within 20 years and a borrowed amount of U.S $40,000 or more becomes repayable within 25 years. When you club all the borrowings, you realize that the monthly payment schedule is way beyond your current means, and this is where the consolidation becomes the mode to keep the debt within reasonable repayment limits. It offers clubbing all loans into one debt, restructuring the monthly payment through single check, and all this with a lower interest rate and extended payment duration. What Student Loan Consolidation actually does is simplify the repayment procedure so that the graduate student has more time to focus on a career while keeping the debt within a manageable means.
You do not actually save money by opting for loan consolidation, but it does offer a short term relief.