When is the Best Time to Consolidate Student Loans?

Here is a great article on student load consolidation by Chris Studer: There is no better time than the present to consolidate student loans. Consolidating or refinancing student loans can easily save borrowers up to 52% on their current loan payments so most people are anxious to consolidate as soon as possible. Many students take out subsidized and unsubsidized Stafford loans every year of college - a total of 8 different loans, all accruing interest at a variable rate, and all showing as open and unpaid lines of credit on credit reports. Many students also take additional loans throughout their college years such as Perkins loans and various industry specific loans, further increasing the benefits of a single low interest loan payment. By consolidating your loans, you'll take out one fixed rate loan to pay off all of the other unpredictable variable interest rate loans. The repayment period of a consolidated loan is longer, meaning much lower monthly payments. For those just out of college and starting careers, lower student loan payments offer a safe way to improve cash flow and reduce dependence on credit cards. Unlike regular student loans, there are no deadlines for consolidating, although consolidating during certain times of the year can result in more savings. For those planning ahead, the absolute best time to consolidate is during the six month post graduation grace period. Refinancing student loans during this grace period means locking in to 0.6% lower interest rates than are available after the grace period has ended. The loan consolidation process can take several months so it's critical to start the application processes soon after graduation. Don't worry about sacrificing your grace period by applying early. For federal loan consolidations you can enter your grace period end date so that the loan won't begin until that date. The most important time to refinance in general is when you need to increase cash flow and reduce or reorganize your monthly bills. Making high student loan payments and having just enough left over to only pay the minimum balance on high interest credit cards just doesn't make financial sense. Through consolidating, the average $350 monthly loan payment can be reduced to around $165, freeing up an extra $185 per month to pay down high interest debts. If possible, save the money and free yourself from debt altogether. $185 per month saved over the course of 5 years adds up to $11,000 to purchase a vehicle outright, start a business, or use for a down payment on a home. Although the loan amount is longer, leveraging your payments so that you pay less when your career is young can give you the cash flow needed to get your life off to the right start. Any time is a good time for refinancing student loans. Low fixed interest rates and longer repayment terms are a winning combination for anyone looking for a smarter way to manage their monthly budget. About the author: ScholarPoint Financial, Inc. is a national online consumer lending company specializing in student loans. We believe in combining state-of-the-art technology with world class service to help students and parents easily gain access to data, become informed, and enjoy the process of obtaining a college loan. Learn more about Student Loan Consolidation at http://www.scholarpoint.com

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Check out the DebtWizard from LowerMyBills.com. They try to find the right debt solution for you, find companies you can trust and help you to take action.

Get Out Of Debt Now

If you are swimming in debt, it is time to act now. Every day you wait increases the likelihood that you will not escape from under the weight of the debt. Credit card debt, debt from cars, department store debt, installment loans, you name it. Don’t wait any longer. Consider your options and act! You cannot afford to wait. The banks are just sitting there ready to take your house, your furniture, anything of value. They will sue you if you default on your loans. They do not have any mercy. For the banks, it is all just business. You are a number with a value. Get help right now. There are many options that I have written about on this blog. See which option to get out of debt seems like it may work for you and get help now.

Bankruptcy - Debt Management Last Resort

Some more excellent information from www.ftc.gov. Personal bankruptcy generally is considered the debt management option of last resort because the results are long-lasting and far reaching. People who follow the bankruptcy rules receive a discharge - a court order that says they don’t have to repay certain debts. However, bankruptcy information (both the date of your filing and the later date of discharge) stay on your credit report for 10 years, and can make it difficult to obtain credit, buy a home, get life insurance, or sometimes get a job. Still, bankruptcy is a legal procedure that offers a fresh start for people who have gotten into financial difficulty and can't satisfy their debts. There are two primary types of personal bankruptcy: Chapter 13 and Chapter 7. Each must be filed in federal bankruptcy court. As of April 2006, the filing fees run about $274 for Chapter 13 and $299 for Chapter 7. Attorney fees are additional and can vary. Effective October 2005, Congress made sweeping changes to the bankruptcy laws. The net effect of these changes is to give consumers more incentive to seek bankruptcy relief under Chapter 13 rather than Chapter 7. Chapter 13 allows people with a steady income to keep property, like a mortgaged house or a car, that they might otherwise lose through the bankruptcy process. In Chapter 13, the court approves a repayment plan that allows you to use your future income to pay off your debts during a three-to-five-year period, rather than surrender any property. After you have made all the payments under the plan, you receive a discharge of your debts. Chapter 7 is known as straight bankruptcy, and involves liquidation of all assets that are not exempt. Exempt property may include automobiles, work-related tools, and basic household furnishings. Some of your property may be sold by a court-appointed official - a trustee - or turned over to your creditors. The new bankruptcy laws have changed the time period during which you can receive a discharge through Chapter 7. You now must wait 8 years after receiving a discharge in Chapter 7 before you can file again under that chapter. The Chapter 13 waiting period is much shorter and can be as little as two years between filings. Both types of bankruptcy may get rid of unsecured debts and stop foreclosures, repossessions, garnishments and utility shut-offs, and debt collection activities. Both also provide exemptions that allow people to keep certain assets, although exemption amounts vary by state. Note that personal bankruptcy usually does not erase child support, alimony, fines, taxes, and some student loan obligations. And, unless you have an acceptable plan to catch up on your debt under Chapter 13, bankruptcy usually does not allow you to keep property when your creditor has an unpaid mortgage or security lien on it. Another major change to the bankruptcy laws involves certain hurdles that a consumer must clear before even filing for bankruptcy, no matter what the chapter. You must get credit counseling from a government-approved organization within six months before you file for any bankruptcy relief. You can find a state-by-state list of government-approved organizations at www.usdoj.gov/ust. That is the website of the U.S. Trustee Program, the organization within the U.S. Department of Justice that supervises bankruptcy cases and trustees. Also, before you file a Chapter 7 bankruptcy case, you must satisfy a "means test." This test requires you to confirm that your income does not exceed a certain amount. The amount varies by state and is publicized by the U.S. Trustee Program at www.usdoj.gov/ust.