The loan term of the consolidated loan can be extended to as long as 30 years, and this can be also a possible reason that lower repayment amount is granted. The long number of years where repayments are made, like 30 years, can make the overall total amount paid higher, but borrower should think of the more affordable amount for payment monthly rather than this. It can be beneficial, with more easy on the pocket loan repayment amount and not giving the student borrower more financial headaches. This loan consolidation can only be availed of with federal student loans and not for student loans coming from the private banks, per Bruce Mesnekoff.
The kinds of student loans that can be consolidated can be several, like the subsidized federal student loans or the unsubsidized federal student loan types. These are also the federal student loans that should be not on default or the student borrower should find and meet certain requirements before qualification is met. Eligibility for this loan consolidation can start after the student has graduated or still within the grace period for repayment. If the loan is already on default, the student borrower should be on a qualified repayment term with the loan servicer. It can also be under agreed terms with the loan servicer, like repayments under the income based repayment scheme, pay as you earn repayment plan, or the income contingent repayment plan. However, all these loans should only be the federal student loans and not the private loans included, per the student loan expert Bruce Mesnekoff.
Federal student loans that are consolidated will only have one fixed interest rate, which can also be the weighted average of all the federal student loans that are combined. This interest rate will be fixed for the entire lifetime of the consolidated loan, and borrowers should not fear that interest rate will rise after some time, during this whole term of the loan. This can also be a benefit, considering that loan amount is fixed also because there is no increase in interest rate, and only can be availed of with the federal student loan consolidation program, per Bruce Mesnekoff, the expert on student loan management and consolidation.
If there are other repayment plans that the student borrower can think of, surely there are also others, but borrowers should think only of the repayment plans that are to their benefits. They should think of this or they will face more financial troubles in the future. They should think of repayment schemes that can make their easy way out of having more financial concerns because they find difficulties in making the repayments.
Thinking of the easy way out of having potential financial problems, repayment schemes that are more affordable can be this way for the student borrower. This can be the federal student loan consolidation program where repayment amounts are low, thus more affordable for the student borrower, according to the expert on student loan consolidation Bruce Mesnekoff.
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Student Loan Help Center General Manager Bruce Mesnekoff joins us to Discuss the Student Loan Situation in America
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