Taking up student loans is a common phenomenon the world over. This is why, when one wants to consolidate a student loan, it is important that one knows what they are getting themselves into. As when you are making any financial decision, one must undertake a lot of research before putting anything into pen and paper. The process of consolidating a student loan is not that difficult. But there are some rules and regulations that one has to be familiar with before they consolidate their loan into one which they can be able to manage.
Student loan consolidation rules
The process of loan consolidation is free
All students should know that obtaining a student consolidation loan is a free process. Therefore you are advised never to pay even a single cent in the name of loan consolidation fee. If you encounter a lender who wants to charge you an upfront fee to consolidate your student loan, then you should know that that is somebody who is out to swindle you your money and hence you should take your business somewhere else. In general terms, it is a scam that is referred to as the advance fee loan scam. It is very common when one is dealing with student loan consolidation.
You cannot undertake the consolidation process while still in school
It is only possible to begin your students’ loan consolidation process when the loans have entered the grace period, which is usually six months after you have graduated or dropped out of college. It is also possible for you to consolidate it when your loan repayment has begun, although it is advisable that you undertake the process before it comes to this point. Undertaking this at this point may not be beneficial to the parties involved. But it is worth looking at the options that are on the table to establish whether you can save some money or make the loan a little bit more manageable for you.
Only student loans that are in your name can be consolidated
This rule seems to be pretty obvious to a majority of us. But there are some special cases where you may find that the student is married or the loan has the name of their parents on it; then this rule comes into effect. It is allowed that parents and students can consolidate their student loans together, but one should note that it is not possible for them to combine them into one consolidation loan. Each of them must be done separately.
There are no payment penalties
It is possible to pay off your student loan consolidation at any given time without having any worries about any prepayment penalties. But it is highly recommended that one pays off the consolidated loan as soon as they can manage so that they can avoid the interest charges that keep on accumulating since this will relieve you of the financial burden that comes with repaying this loans.…