A federal student loan consolidation program allows a consumer/student who has more than one student loan (undergraduate and/or graduate studies) to merge some or all of the loans into one single loan, usually with better overall interest rates, terms and conditions. Before discussing in detail the process of student loan consolidation it is important to be familiar with the commonly used terms as well as important points of student loan consolidation.

Consolidating Student Loans and Credit Rating

Student loans are categorized as credit transactions. This means that it can be included in credit reports, and lie every information there, any default will be considered a negative mark on your credit rating. Therefore consolidating loans before they fall due is an effective way to maintain and/or repair your credit rating.

Consolidating Student Loans: Interest Rates

As a general rule a student loan consolidation provides fixed interest rates computed using the weighted average loan rates rounded to the nearest.125%. Now in most cases this is no different than the loan rates however take note that it requires the interest rates to be fixed rather than adjustable. This in itself is enough reason to opt for student loan consolidation.

Consolidating Student Loans: Federal Loans

There are generally three types of Federal loans. The term federal is indicative of the fact that these loans follow federally mandated minimum requirements and are subsidized by the federal government. These loans are:

1. Federal Stafford Loan: The most basic type of federal loan available to students regardless of actual financial need and is available for both undergraduate and graduate studies.

2. Federal Perkins Loan: The most advantageous type of loan both in loanable amount and interest rates. However this type of loan is reserved to undergraduate and graduate students who show exceptional academic achievements and actual financial hardship or need.

3. Federal Plus Loan: A privately funded student loan type that does not have a limit rather it is limited by the consumer’s immediate out of pocket college costs after all other financial aid programs have been exhausted.

Consolidating Student Loans vs. Student Loan Rehabilitation

Both terms are not the same, the former describes a new loan used to pay for previous student loans while the latter describes an arrangement with the lender to remove the default status by applying for rehabilitation and making nine payments on time and within twenty days of the installment due date.

Consolidating Student Loans through Credit Unions

A credit Union is a nonprofit organization that provides loans for its members. The fact that it is run not for profit means the interest rates should be reasonably lower. Tip, find a co-signor and remember that most credit unions allow a co signer to be removed from liability if the principal borrower makes timely payment for 12 straight months.

Consolidating Student Loans: Reference Websites

Do not attempt to consolidate student loans without browsing through the websites of the following agencies:

1. Federal Direct Student Loan Program (FDLP)

2. Government Accountability Office (GAO)

3. National Student Loan Data System (NSLDS)

4. Federal Student Aid

Most finance savvy borrowers would like to understand how the home loan EMI calculators function, what information they offer and how this information can be used to the best of its advantage, So, check out the most frequently asked questions by Indian borrowers to get the maximum out of these EMI calculators.

What is an EMI calculator?

The perfect home loan EMI calculator is certainly not a basic home loan calculation in an excel sheet or a basic calculator in itself. It is a smart way to understand this multi-dimensional financial product that you used to buy your home and repay over a period of 20 to 30 years. Therefore, don’t look at it as just a way of calculating your monthly home loan EMIs since it is a system to understand multiple aspects of the housing loan.

What are the pros and cons of an EMI calculator for home loan?

The main advantage of the EMI calculator for home loan is that it helps you to understandhow different aspects of the home loan affect your interest rate, principal amount and the EMIs. It is a complex home loan calculation. This calculator acts as the simplifier and allows you to see the impact of any or all changes on the multiple aspects of the home loan.

On the other hand, you must enter the right loan amount; which may be difficult to anticipate for most borrowers, who haven’t finalized the property and lender details. In addition, understanding the range you can afford may not help you much if your credit score is too low or repayment ability is not right to receive that kind of a house loan offer. So, practical understanding of the basic range is essential till you receive a home loan offer.

How do I use the housing loan EMI calculator to my advantage?

Before you begin your home loan calculations, you must know the loan amount clearly. Since this amount is going to be different than the basic cost of the property, you need to be sure about the other involved expenses too, since it will help you to get the most out of a housing loan EMI calculator in India . It will help you to identify the range of interest rates that you can afford every month for the foreseeable future along with a suitable tenure. It will also assist you with the amortization table that can offer some unique insights in the repayment options, which you may consider rather than the standard repayments. But, you must remember that the amortization table does not show you the EMI proceedings for the different repayment options, though.