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Federal government uses a guaranteed student loan program to help college students pay for their education. The program allows students to borrow money at a reduced interest rate and defer payment until they are no longer in school. Student loans are generally offered as part of a total financial aid package that may include grants, scholarships, or work study opportunities.

Student Loan Consolidation combines several student or parent loans into one bigger loan from a single lender, which is then used to pay off the balances on the other loans. Consolidation loans often reduce the size of the monthly payment by extending the term of the loan beyond the 10-year repayment plan that is standard with federal loans. Depending on the loan amount, the term of the loan can be extended from 12 to 30 years. The reduced monthly payment may make the loan easier to repay for some borrowers. However, by extending the term of a loan the total amount of interest paid is increased.

The interest rate on consolidation loans is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest 1/8 of a percent and capped at 8.25%. If a student consolidates their loans before they enter repayment, the interest rate used is the lower in-school interest rate.

Alternatives

Consolidation simplifies the repayment process but does involve a slight increase in the interest rate. Students who are having trouble making their payments should consider some of the alternate repayment terms provided for federal loans. Income contingent payments, for example, are adjusted to compensate for a lower monthly income. Graduated repayment provides lower payments during the first two years after graduation. Extended repayment allows you to extend the term of the loan without consolidation. Although each of these options increases the total amount of interest paid, the increase is less than that caused by consolidation.

Private student loan consolidation is a great way to significantly lower your monthly loan payments by combining all your private student loans into one manageable loan. Refinancing your private student loans will reduce the stress of multiple payments and allow you to budget more effectively while lowering your interest rate.

Student loan relief is available for students or college graduates who are having problems making their loan payments. There are many reasons and hardships that can keep a consumer from taking care of their debt in a timely manner. As a result, there are a variety of relief programs that aid consumers in such times and circumstances. Bankruptcy is a last resort for financial trauma, and student loans are not dischargeable, making some type of assistance crucial for even those filing bankruptcy. Getting information on student loans relief can be helpful as graduates seek to take care of debt, but get help in difficult times. College graduates often finish their programs of study with a sizeable debt in addition to their chosen degrees; assistance is often needed to help these graduates find a practical way to address and manage this debt.

Get a Student Loan With Bad Credit

Here are several ways which will help you get a college loan with bad credit.

1. Getting a co-signer. A family member with good credit can help you get loans with favorable rates and terms, despite your bad credit.

2. Contact banks and other private lending institutions and describe your situation. In many cases, they will still lend to you, but at a much higher interest rate. The interest rate will be determined by your credit score, the amount of the loan and the repayment period.

3. Apply for a combination loan which consolidates existing loans while applying for a new tuition loan. It may be necessary to have a co-signer in order to get approved for the loan.