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federal student loan application

Education forms the base of a student to succeed in future carrer .To fulfill his aim in life students may opt for consolidation student loan, available for the students staying in the Federal states. Such hassle free loans enable the student to complete his and her education successfully. Studen Loan Consolidation in the FFELP (Federal Family Education Loan Program) is designed to provide help to the students paying their Federally Backed student loans.

Certain benefits can be opted for consolidating in the FFELP program.:

* Fixed Interest Rate
** Lower Monthley Payments
*** No Pre-Payment Penalties
**** Retain all your federal rights such as Deferment and Forebearance
***** Subsidized portions remain subsidized even after consolidating
****** Forgiveness rights for Stafford Loans are retained.

There is no downside to consolidate such student loans. Even though the program increses the repayment term from the standard 10 year term to 15, 20, 25, or 30 years depending on the balance of the loan. Repayment of the loans in suitable time helps to prevent prepayment penalties . Maximum repayment terms includes:

$10,000 - $19,999 (15 years)

$20K - $39,999 (20 years)

$40k - $59,999 (25 years)

$60K + (30 years)

With the introduction of FFELP consolidation program the students are receiving both financial freedom and flexibility. Moreover, space on the application allows students to fix their ; own repayment term up to the maximum term of the ; loan balance.

Students should typically consolidate their loans after every time they switch schools, between any breaks (summer break not included), and whenever enrolled less than 6 credits. They should also consolidate while in their grace period to take advantage of the .6 in school/in grace reduction in interest rate. Most consolidation companies can save their entire grace period by holding the application until right before the end date of the grace period It is advisable to the students to ; mention grace period to the people with whom consolidation is made.

According to the new legislation passed in June 2006, it possible for students who only have a single lender can benefit from consolidating. These students will also benefit from a fixed interest rate even though it\'s not a consolidation in the true sense of the word.

Similiarly, in July of 2006, new Stafford Loans were issued at a fixed rate of 6.8% and Parent Plus Loans at 7.9%. Purkins Loans are always issued at 5.0%. Students with Stafford Loans and Parent Plus Loans prior to July 2006 had variable rates. The rates were reset from 5.375% to 7.14% for Stafford Loans and from 6.1% to 7.94% for Parent Plus Loans.

The interest rate for a FFELP Consolidation loan is derrived by taking the weighted average rounded up to the nearest 1/8 of a percent. A consolidation of variable rate Stafford loans will typically attract a student at 6.625% (in grace) or 7.25% (out of grace). Some companies offer a 1/4 rate reduction for signing up for automatic check debit and an additional rate reduction for maintaining on-time payments for a specified amount of time.

There is a weighted average applicable - an average that considers the proportional relevance of each component rather than treating each component equally.

Instances on a comparitive study on the average :
$2,000 @ 4%

$5,000 @ 1%

$3,000 @ 10%
Thus a standard average puts you at 5%.

Now Weighted average calculation:

($2,000 x 4%) = 80

($5,000 x 1%) = 50

($3,000 x 10%) = 300
80 + 50 + 300 = 430/$10,000 = 4.3%
It is easily understandable from the above that ; $5,000 at 1% weighs more heavily on the interest rate than the other two loans. If the student had a consolidation set for the exact same ammount of time as the orriginal loans he/she would pay exactly the same ammount of money if a weighted average was used.

Thus Consolidating on loans, could certainly help the student. Whle attempting a call it is essential for students to know that a consolidation company comes under the federal program and can provide them with a registered number with the US Department of Education. * Advice on consolidated rates of student loan

1. A detailed search is necessary before taking any decision on student loan consolidation rates. It is advisable to opt a lender who is offering low monthly rates and provides good facilities.

2. Since a student has to pay differently to a loan provider ,it is better to get only student loan consolidation only as it will ease all tensions in one package.

3. At present some federal consolidation loans have a lifetime fixed rate It\'s best to do research to see what the best interest rates and term a student is eligible for the loan. online checking via Internet facilitates to; calculate the interest rate on a new student consolidation loan based on the rates of; the currently available student loans. Calculation procedure incudes rounding up to the nearest 1/8th of a percent of the weighted average of the interest rates on the eligible student loans.

4. Federal consolidation rates can give relief by extending the payment period up to 30 years. This paves the way for focusing on the studies of the student effectively and pay back all the debts after getting a ; good job.

5. School going students can get loans on low rates under the consolidation stdent loan programme.

6. Owing to the low interest rate,students at present can get a much better all time low interest rate.Such opportunity was not applicable to earlier students as they had to pay higher interest on the loan.

Thus with the passage of time,things have made a drastic change boosting the financial industry in the Federal countries.

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