Loans that can be Consolidated – The Stafford Student Loan

Student Loan Consolidation – Looking at your Choices

Unconsolidated loan balances may be difficult to repay, thereby making it a necessity to consolidate your debt. However, before you make the decision, it is a good idea to look at some of the individual features of each loan to make sure you are making the right determination. You can lose certain benefits—such as discounts and cancellation privileges—when you consolidate, so make certain it is something you really want to do. In addition, consolidation can double the amount you pay back over the long haul, so a student loan consolidation is not a choice that you can afford to take all too lightly. That’s why it is good to review the features of your unconsolidated loan accounts.

Features of a Stafford Loan

For example, Stafford loans are federal loans that offer low APRs, generally are long-term, and are granted to students. Once your college career concludes, the loan must be repaid a half year or six months after you graduate. Also, if your status as a student is classified as less than part-time for a six-month period, then repayment must be facilitated. The loan can either be taken out in the form of a subsidized loan or as non-subsidized funding. The interest on a subsidized Stafford loan is government-paid and the student has a payback period of ten years on the loan.

Non-subsidized Stafford Loans

On the other hand, non-subsidized Stafford loans start accruing interest from the time they are granted to the borrower. In some cases, banks or lenders will allow the borrower to make interest-only payments while they are in school. Or, in other cases, the interest is added to the principal of the loan amount and therefore capitalized at the beginning of the period for repayment. Non-subsidized loans, in many instances, supplement unsubsidized Stafford financing. Again, students must pay back the non-subsidized loans within ten years.

No related posts.