The Benefits of Student Loan and Private Student Loan Consolidation
Advancements in technology and science, accompanied by high demand for higher education, education nowadays has become extremely expensive. Parents as well as students are at a loss as to how to tackle such a problem. Just as every problem has got its unique solution, so is the case here. The solution has appeared in the form of student
loan and private student
loan consolidation.
The concept of
student loan came into being, when it was found that many meritorious students drop their higher studies, due to the fact that they do not fulfill the adequate financial requirements. Talent being pushed to the back yard due to lack of proper resources. The financial institutions like banks began to help the needy with money. The primary reason being that talent should not suffer, and the lack of funds becoming the crux of not being able to pursue further studies.
The eligibility criteria for availing the student loan are, firstly a grace period of six months is offered, which means that after graduation no payments are due until six months or after the student, without graduating becomes a less-than-half-time student. In both cases, there is quite a modest annual limit. The student loan amounts vary according to the academic category of students. Subsidized loans are exclusively for students with financial needs, that have been demonstrated. There are set limits as far as the maximum and minimum limits are concerned, they too vary depending upon the course of study.
The student loan is repayment is also subject to certain criteria as per the student's financial condition, there is also a 100% loan discharge possibility, in case the requirements are met.
Next comes the private student loan consolidation part, the private student loan usually has variable interest rates. The eligibility criteria for availing the private student loan consolidation primarily are to have cosigner or co-endorser or co-borrower. The credit history of both the applicant and the cosigner is scrutinized before sanctioning the loan. Moreover, it is mandatory for the student to either be a US citizen or have a cosigner who is a US citizen. Students opting for this option are subjected to the same rules as far as the repayment is concerned. They are non dis-chargeable in case of bankruptcy.
Though apparently friendly, the student loan and private student loan consolidation have also been criticized on grounds of high interest rates, and unfriendly relationships between students and lenders.
Thus a comparative study of the two shows that both are more or less similar in their terms and conditions. Like all business propositions, these two also have their business connotations. But on the whole they help the students to convert their dreams into reality, which otherwise would seem far-reaching and impossible to materialize. However, the advice to all students and parents who are contemplating these options as probable solutions is that first adequately educate yourself about the options and have all queries cleared by authorized professionals, if required. Then, opt for the option you find most convenient. As the maxim goes better safe than sorry.
Jacklin Samanta has published 1 article. Article submitted on Thursday 20th January 2011. Word count: 512
