Loans Debt Consolidation

When your student loans get the best of you and you're wondering how you're ever going to get out from under all that debt, take a look at loan consolidation. A Sallie Mae loan consolidation replaces your existing multiple student loans with one loan, usually with a dramatically lower interest rate - as low as 4.75%. The difference a few percentage points can make in monthly payment amounts can mean the difference between scraping to pay bills and actually having a little extra pocket money. It is not uncommon for a borrower to get a fixed interest rate that is up to 0.6% lower than their current rates. According to federal regulations, calculating the interest rate on a consolidated loan disbursed on or after July 1, 1994 involves the weighted average of the interest rates of the old school loans you are consolidating under the new one, rounded up to the nearest one-eight of one percent. Fixed interest rates on a consolidated loan cannot exceed 8.25 percent. Every July 1, the interest rates on federal student loans are subject to change according to the annual fluctuations of short-term federal securities, and with them your monthly payment. A Sallie Mae loan consolidation also offers the opportunity to increase the length of the loan. Applying on-line for a Sallie Mae loan consolidation is free, there are no fees, and there are no credit checks. A few minutes of your time can get you smaller monthly payments and better credit scores; when your Sallie Mae loan pays off your old student loans, your credit report reflects those paid off debts. Things happen in life and in a crisis sometimes, those student loan payments don't get made on time, or at all. If you are facing a situation where defaulting on one or more of your current loans is a very real possibility, acting now to take advantage of a Sallie Mae loan consolidation may save you many problems and help you out of an overwhelming situation. If you decide that a Sallie Mae loan consolidation is what you want, there are four options for repayment plans, the Standard Repayment Plan, the Extended Repayment Plan, the Graduated Repayment Plan, and the Income Contingent Repayment Plan. The Standard Repayment Plan offers fixed monthly payments, but the life of the loan is limited to 10 years. The Graduated Repayment Plan also spreads payments over 12 to 30 years, but the monthly payments increase every two years. The Income Contingent sets a payment plan that is calculated on your annual gross income, family size, and total consolidated loan debt, figured into a period of 25 years to pay it off. A Sallie Mae loan consolidation could be the best option for you, but be sure to explore your options thoroughly to make sure you get the best loan for your situation.

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