School Loan Consolidation

This school loan consolidation program is a federal program. Federal law mandates that all lenders offer the same initial fixed interest rate, minimum monthly payment, and loan repayment term. Therefore, because their benefits package is the sole difference between lenders, borrowers should consolidate their federal student loans with the lender that offers the best benefits program. The Educational Company (EC) offers an exceptional consolidation benefits package. The following information will allow you to compare EC's loan consolidation incentives with those of our competitors.

The Educational Company is an authorized and approved lender of federal student loans. Our FFELP (Federal Family Education Loan Program) Identification Number is 834003. All loans originated by EC are guaranteed, insured, and backed by the United States Department of Education.

The Educational Company offers the best benefits package of any federal student loan consolidation program. EC can save you the most money and offer offer you the best overall discounts in the industry for federal student loan consolidation.

Our loan rates are second-to-none after applied benefits. Consolidating federal student loans with the Educational Company is a simple and easy way to save you money. We guide you through the process with step-by step information. Consolidation allows borrowers to combine all of their current federal student loans into just one loan with one lower payment, eliminating the need to manage several bills each month.

Use our Federal School Loan Consolidation Calculator to see just how much you can save! You can also visit our section on Frequently Asked Questions on federal student loan consolidation issues that have helped our customers.

You can find out more information to see if you are eligible for an EC consolidation loan. EC is the leader in providing discounted federal school loan consolidation programs. With one lender, one loan, and one payment, you can look forward to more convenience, more time, and more savings. Secure these advantages today by applying for the best consolidated student loan from the Educational Company.

Student Loan Consolidation: The Other ReFi Boom

By: Elizabeth Belli

You've heard about refinancing in the mortgage market. Who hasn't? Interest rates are at all-time lows. Folks have refinanced two and three times in as many years to save thousands of dollars in interest they would have otherwise paid.

There's a similar lesser-known boom happening in the world of federal student loans, because refinancing or consolidating them can also help borrowers save thousands of dollars in interest expense.

The two most common types of federal student loans available today are Stafford loans (for students) and PLUS (Parent Loans for Undergraduate Students). The variable interest rates on these loans are the lowest they have been in over 30 years - currently, Stafford loans carry a variable rate of 3.46% while the student is in school, deferment and grace, and 4.06% in repayment. PLUS loan interest rates are currently 4.86% regardless of the student's status. If those rates would hold over the standard 10-year repayment term, that would be the end of this story. But, they won't hold. Federal student loan interest rates reset every year on July 1; Stafford loans rates can climb as high as 8.25% and the PLUS cap is 9%.

The great news for borrowers is that consolidating these loans locks in a low interest rate. The formula for determining a Federal Consolidation Loan interest rate is to take the weighted average of the interest rates of the loans the borrower wishes to consolidate and round it up to the nearest 1/8%. So, for example, if a borrower had only Stafford loans in repayment issued since July 1, 1998, the variable interest rate on these loans is currently 4.06%, and the fixed interest rate for that borrower's consolidation loan would be 4.125%. That's 4.125% for the life of the loan - which can be up to 30 years depending on the borrower's level of indebtedness.

Now, that's a deal every person with student loans should be considering right now. Because on July 1, 2003 rates will reset.

And there are other advantages to federal student loan consolidation. With extended repayment and graduated repayment options, borrowers' monthly payments can be reduced by 50% or more - especially helpful to recent graduates trying to make ends meet. And, if a borrower has multiple lenders and multiple monthly payments, consolidation lets the borrower make a single and (generally) a lower payment to a single lender - simplifying bill payment and improving cash flow. Finally, federal student loan consolidation is free - there are absolutely no fees to consolidate.

Although the terms of a Federal Consolidation Loan are exactly the same, regardless of who lends you the money, a number of lenders are offering incentives to get borrowers to consolidate with them. And, these incentives can save borrower hundreds, even thousands of dollars in additional interest. Most common is a .25% interest rate discount when borrowers agree to repay their new consolidation loans electronically (direct debit). A more significant discount is offered by some lenders when borrowers make timely monthly payments on their new consolidation loans. For example, ConsolidateYourLoans.com offers a 1% interest rate reduction after the borrower has made the first 36 consolidation loan payments on time. Other lenders offer the same discount after 48 or 60 payments, and others offer lesser discounts at other payment intervals, but the idea is the same. Just keep in mind, the faster you get the discount and larger the discount is, the more you can save.

There are a handful of federal student loan consolidators and, right now, the volume of loans they are originating is large, but manageable. Most consolidations are completed in 45-60 days. But, you can bet that the number of people seeking consolidation is going to grow as the deadline (June 30, 2003) approaches, and lenders will see an unprecedented number of requests that will most certainly bog the system down to some extent. So, if loan consolidation sounds like a good idea to you, read on to see if it warrants your further investigation and, if it does, get your application in quickly.

Is Student Loan Consolidation Right for You?

Federal student loan consolidation is a great financial opportunity, but it's not right for everyone. To make the best choice for you, you should consider the following:
Q. Can you take on a longer repayment term in exchange for lower monthly payments?
A. For most borrowers, loan consolidation extends the repayment term from the standard 10-year (Stafford loan) term to up to 30 years, depending on your balance. A longer repayment term means that, unless you prepay your loan, you will pay more interest than you would on your unconsolidated loans. You can control your interest cost by choosing one or more of the following:
·Request a shorter repayment term than your balance allows.
·Loan consolidation programs offer a number of repayment options. If you can afford it, choose an equal payment plan. You should always make monthly payments that are as large as you can comfortably afford, and an equal payment plan will cost you the least because you are paying all principal and interest due each month. A graduated repayment plan will reduce your monthly payments in the early years, and you might need to choose one of these plans to make ends meet, but they will cost you more in total interest.
·Prepay your loan whenever you can. Just send a note in to your loan servicer with your over-payment asking that it be posted to your principal balance.
·Don't get behind in your payments. Interest will continue to accrue on your unpaid balance, costing you more.

Q. Do you owe enough and have enough time remaining in your repayment term to really make a difference?
A. In today's rate environment, regardless of indebtedness, most people who have graduated recently or have been repaying their loans for less than 5 years will benefit. Think twice about student loan consolidation. Part II By: Ian McAllister Student loan consolidation is excellent - for for some people. Spot the hidden trap that could ruin your life... a clever animal can steal from a trap without being caught! ------------ * Part I Don't get into debt. Ways to avoid it. * Part II This article * Part III Idea beats student loan consolidation and creates a winning mindset. ------ Part II ------ Imagine two people Each has a student loan consolidation debt of $100 000. The born loser will soon have borrowed more. The investor uses the student loan consolidation as a springboard to become a millionaire. What's different between them? The mindset, and only the mindset. Get the right mindset. --------- The big trap --------- Have you a strong willpower? Will you go on a spending spree and owe $5000 on each card tomorrow? A student loan consolidation is not for you. Read Part III of this article. Have you the will power to master your finances? Combine student loan consolidation with Part III. ------------ What is Student Loan Consolidation? ------------ You transfer all your existing loans to one low-interest account. What's in student loan consolidation for you? * If you have Stafford loans in the USA, you’ll have a grace period of six months after graduation to take out a student loan consolidation. * Interest rates are lower * Easier to remember payment dates with one loan * Improved credit rating Credit cards might charge 20% interest. Wouldn't a student loan consolidation at 5% be better? Look for extra discounts on student loan consolidation during the grace period. Do you get an extra discount after 2 years of prompt payments. Do your homework properly. Were you only paying 3% fixed interest on your Stafford loans and interest rates have gone up to 8% variable rate on your student loan consolidation? How high could the rates go? If you get a fixed rate student loan consolidation, and new student loan consolidations fall to 3%? Computers calculate your credit rating. Suppose you took out a subsidised and an unsubsidised Stafford loan for each of four years. Computers can't really think. They see that you have 8 long-term loans and never paid back a single cent. You’re obviously a very bad credit risk before your student loan consolidation! After your student loan consolidation computers see that you've only 1 loan and you're making regular payments. They give you an excellent credit rating. Don't spoil it with new credit card debts. ----------- Avoiding student loans ----------- In part 1 you read about vital life skills that mean lower student loans for student loan consolidation, or even none. You can make your money go twice as far, which means that you'll effectively be twice as rich, and the IRS can't touch you for it. Without these life skills, you'll be helpless when you suddenly have to pay for food and lodgings, credit card, car loan, mortgage, health... it's never-ending! Many students can't handle it. Part III will help you even if you have a student loan consolidation. Have you decided on student loan consolidation? * Check how much they will lend * Can you consolidate your other debts... credit card and car loan? * Will you need proof of income? * Can you choose between fixed and variable interest? * Are there pre-payment penalties? Avoid them like the plague! * What are the penalties if you default? If you are unemployed or lack self-discipline you are likely to default. * What other loans must you get - mortgage, kid's schooling? Avoid lenders that make you start repayments of your student loan consolidation the day after the grace period. Check for special incentives. A 1% discount after 2 years regular payments may not sound like much, but it adds up over time. Negotiate. Lenders are eager to lend you money, however much they bluff. They are legally allowed to lend 35 times as much money as they have, and they make no profit until they lend it. "No start-up costs" may be good, but low interest rates and absence of prepayment penalties for your student loan consolidation are better. ----------- What's in Part III ------------ A better alternative to student loan consolidation? * Build self discipline. * How will interest rates for student loan consolidation change next 20 years? Don't know? Then student loan consolidation might not be the best bargain. * You’ll be in control... not at the mercy of student loan consolidation providers. Don't be a loan addict all your life. The ideas in part III were used by an Australian to become a millionaire.