1. What is Student Loan?

The loan taken by students to meet the escalating cost of education is known as Student Loan.

2. Why do you need Student Loan?

Education is highly expensive in today’s world and to meet it on your own is very difficult. This is the reason why you need Student Loan.

3. For what purposes do you need Student Loan?

Student Loan are necessary not only to meet the exam fees, college fees had tuition fees but also to meet the cost of books, food, boarding and so on.

4. What are the types of Student Loan?

There are two types of Student Loan, depending on who is your lender- Federal Loan, given by the government, and Private Loan, given by the Private Lenders.

5. Which are more preferable? Why?

Federal Loan are much better than private loan because

• They carry lower rates of interest,
• They carry no interest during the period of schooling, and
• There is an interest deferment for a period of 6 to 9 months after the period of schooling.

6. Can we do away with Private Loan?

Federal Loan are not sufficient to meet the entire cost of education for all. This is the reason why you need private loan. They are also known as Alternative Source of Financing.

7. Why do students find it tough to repay Student Loan?

The main reason why students find it tough to repay Student Loan is because

• They accumulate too many loans in an immature way,
• They find it hard to land on well paying jobs immediately,
• They have too many loans with different lenders and find it tough to keep track of the same.

All these reasons force the students to default on their loan.

8. What is the remedy to repay Student Loan easily?

The best remedy that students can avail to avoid defaulting on their loan is Student Loan Consolidation.

9. What is Student Loan Consolidation?

Student Loan Consolidation is the process by which all educational loans with various lenders are combined into one loan under one lender with one rate of interest.

10. Can Private Student Loan be consolidated?

Yes, both Federal and Private Student Loan can be consolidated.

11. What are the types of Consolidation?

Depending on the type of lender, Consolidation is of two types:

• Federal Consolidation provided by the government and
• Private Consolidation provided by Private Leaders.

12. Which is better type of Consolidation? Why?

Federal Student Loan Consolidation is better than Private Student Loan Consolidation because

• the former reduces monthly installments a lot,
• it has a fixed rate of interest,
• it nullifies the hassle of making multiple payments,
• it improves your credit rating as all your previous loan are considered as repaid and
• it improves your cash flow.

13. What is the demerit of Federal Student Loan Consolidation?

They do not accept Private Student Loan.

14. Is it a good idea to consolidate Federal and Private Student Loan with a Private Student Loan Consolidate?

No. This is definitely not a good idea as you will lose all the benefits of your Federal Loan by this method. If you have Federal Loan, you should consolidate them with a Federal Consolidator only. However, since they do not accept Private Student Loan, you can consolidate Private Student Loan with a Private Consolidator.

15. Are there any fees charged while consolidating Student Loan?

There are no fees charged for consolidating Federal Student Loan, However there may be fees charged for consolidating Private Student Loan.

16. Is there a credit worthiness check before consolidation?

There is no such check for Federal Consolidation but there will most probably be such a check for Private Consolidation.

17. Can I stop repaying my loan after applying for Consolidation?

No, you have to continue paying your loan till you are informed that they are repaid. Applying for consolidation is not the same as consolidation-in- place. There is a small time lag between the two and you should continue repaying the loan till then.

18. Is it possible to consolidate Student Loan along with credit card or other debt Consolidation?

No, you can not consolidate Federal Student Loan with credit card and other debts as they belong to different categories.