How to Consolidate Student Loans - Compare Student Loan Consolidation

With the high cost of a college education, more and more students are graduating with a large debt load along with their degree. Most people need to consolidation their student loans and it’s wise to compare student loan consolidation information before making any decisions.
There are two types of student loans – federal and private. Both of these types of loans can be consolidated, just usually not into the same loan. Private agencies as well as governmental agencies offer loan consolidation programs.

When you start to compare student loan consolidation programs, interest rates and repayments terms are what you need to be looking at. Usually interest rates are lower with consolidation programs but you need to be sure the repayment plan will fit into your payoff goals.
There are two types of payment plans usually available.

The first is an equal payment plan. This plan states the monthly payments through the life of the loan. Within this plan there are also these options:

• Interest only payments for the first 2 years and then the interest and principal are figured in to the remaining term of the loan.
• Interest only payments for the first 2 years, then from the 3rd to 5th year of the loan a portion of the principal is including, then for the remaining period of the loan the remainder of the principal is included.
• A repayment plan that is in proportion to your income. As your income increases so do your loan payments.

The second is an extended equal payment plan. This extends the life of the loan for 30 years. Within this plan are the following options:

• Interest only payments for the first 2 years and then the interest and principal are figured in to the remaining term of the loan.
• Interest only payments for the first 2 years, then from the 3rd to 5th year the loan gradually increases to the full amount of the payments for the remainder of the life of the loan