Posted on | June 17, 2012
The Federal Perkins loan program allows qualified undergraduate and graduate students who have a genuine financial need to apply for and possibly get approval for a government subsidized loan program. This is administered by the school. The interest payment is fixed at 5% and the maximum repayment period is 10 years to start a few months after graduation.
Student loan consolidation is a relevant and trending topic due to the high cost of student loans, low employment opportunities and the relatively low level of income fresh graduates generate. This article will discuss whether or not Perkins loans can be consolidated and if doing so will be advantageous for the student/borrower.
Can You Consolidate?
The answer is yes. Consolidation can be thru federal or private student loan consolidation programs. This is because there is no limitation placed by law for the consolidation of Federal Perkins loans.
What is Private Loan Consolidation?
Aside from the above mentioned a student may also choose to consolidate student loans with other types of loans. This can be thru a private lender or thru a banking institution. Again there are no limitations provided for by law but always make sure that you read the entire terms and conditions for the loan consolidation.
What is the Rationale of Student Loan Consolidation?
There are three main reasons for consolidating a loan. First, loan consolidation allows a consumer who is considered in default to be instantly made current. Second, it allows the consumer to bargain for better loan terms. Third it is convenient in that only one loan is payable instead of several.
Where to Find Helpful Information?
In order to get a better idea of this particular type of program, the reader has to read several articles from different websites. It is best to start with websites o related to the federal government. (i.e. Education Department, Federal Direct Student Loan Program, Federal Family Education Loan Program, Government Accountability Office). These websites will not only provide basic knowledge but in depth understanding of the pros and cons of consolidating Perkins loans with other student loan programs. After going thru these websites the reader can then read other private websites, blog sites and social networking websites for more information.
Should You Consolidate Federal Perkins Loan
A 5% fixed interest payment payable for a maximum period of 10 years starting a few months from graduation is a pretty decent interest rate and term. However if the student has other student loans as well as other outstanding obligations about to be or already in default then it would be best to average out the total interest payment as well as payment period to determine the actual total interest payment.
Next, shop around for loan consolidation offers, either student loan consolidation plans or private loan consolidation plans. Request for pre approval to determine the interest rate payable and then compare the same to the consolidated interest rate and period. If one, some or all of the pre approved loan has lower rates and/or more advantageous terms (i.e. ARM to fixed) then you may want to seriously consider consolidating the loan. Otherwise consolidating the same will be more a question of convenience rather than actual savings, in that you only pay 1 lender 1 time per month, rather than several lenders on different dates.