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Factors to Consider About Your Student Loan Consolidation
What are the interest rates for my consolidation loan?
Because federal student loans carry different interest rates, not allconsolidation loan rates will be the same. The rate on your federalconsolidation loan depends primarily on what type of federal studentloans you have and when you took them out. Many companies marketthe lowest possible consolidation loan interest rate to the borrower. Becertain that you can qualify for the advertised rate and fullyunderstand what your consolidation interest rate is, and why.

How are interest rates on student consolidation loansdetermined?
The student loan consolidation interest rate is fixed and is calculated bytaking a weighted average of the rate on the federal loans you areconsolidating, rounded up to the nearest one-eighth percent, not toexceed 8.25%.Stafford loans disbursed between July 1, 1998 and June 30, 2006 have avariable interest rate that resets every July 1. Stafford loans disbursed onor after July 1, 2006 have a fixed interest rate of 6.8%.Parents with PLUS loans and graduate and professional students withGrad PLUS loans can qualify for consolidation as well. Contact a RISLALoan Counselor for additional details regarding PLUS loan consolidation.If you have questions about calculating your consolidation interestrate, please contact a RISLA Loan Counselor at (888) 758-7562. Theywill research your loan history and estimate your consolidationinterest rate for you.

 How much can I afford to pay each month on my federalstudent loans?
Consolidating your student loans might be a great way to reduce yourmonthly payment and help you manage your budget. A consolidationloan provides a lower monthly payment and a fixed interest rate. Keep inmind that consolidation lowers your monthly payment, but increases thetotal cost of repaying your student loan if you choose a longer period oftime to repay. This strategy may be better for you when your earningpower is lower.

 Are there any fees to consolidate my student loans?
 There are no fees associated with a federal consolidation loan.

 Can I pay off my consolidation loan early?
 There are no penalties for early repayment of your student loan.

 If I have already consolidated my student loans, can Iconsolidate them again?
Once you have consolidated your student loans, you can only consolidateagain if you have an eligible student loan that was not included in yourprevious consolidation, or you received a new eligible loan that wasdisbursed after your consolidation loan.

 Can I change my mind after my consolidation loan iscomplete?
You can cancel your application up to two weeks before the funds aredisbursed. After your funds are disbursed, your old loans no longer existand are paid in full. The new consolidation loan Application andPromissory Note is a binding legal contract with your consolidatinglender.

 Do I lose the borrower benefits associated with mycurrent loans?
Borrowers who opt for a RISLA Consolidation Loan will lose the borrowerbenefits associated with their current loans, but will be eligible for theRISLA Consolidation Loan borrower benefits, including a fixed interestrate for the life of the loan, and possible extended terms for repayment.Although student loan consolidation has numerous advantages for mostborrowers, everyone’s individual circumstances are different. If youparticipate in special benefits programs, with rate reductions, loanforgiveness, deferments or forbearances for vocations such as medical,nursing, and teaching, consolidation may adversely affect those benefits.Please review all information closely, call your current lender andappropriate agencies to make an educated decision.

 How long does it take to consolidate my loans once Isubmit my application?
 The consolidation process generally takes 30–45 days once the completedapplication has been received. Using an online application ande-signature can reduce the amount of time it takes to process a loan.

 Factors to Consider About Your Student Loan Consolidation
Should I consolidate my loans or seek extendedrepayment?
 Borrowers who began borrowing on or after October 7, 1998, and haveFederal Family Education Loan Program loans totaling more than $30,000are eligible for extended repayment. Extended repayment can be either aLevel or Graduated schedule that is set up for a repayment term of up to25 years instead of 10 years. This can result in a much lower paymentamount but will also increase the total amount of interest paid over thelife of the loan. Each individual’s situation is unique, and there is nosingle correct answer. Contact a RISLA loan advisor for a personalevaluation.

 When can you consolidate federal student loans?
 you are eligible for a federal consolidation loan during periods of:
 • Grace – The specified period of time between the date you graduateor drop below half-time status and the date loan repayment begins.
 • Repayment – The time during which you’re actively makingpayments towards an education loan.
 • Deferment or Forbearance
 deferment – A period in which you may qualify to suspendstudent loan payments.forbearance – Temporary postponement of payments or smallerpayments.

 How is my interest rate calculated?
In accordance with federal regulations, the interest rate on yourconsolidation loan will be calculated using the weighted average of yourcurrent loans, rounded up to the nearest 1/8th of 1%.Example: If you have a Perkins Loan with a balance of $5,000 at 5% and aStafford Loan with a balance of $15,000 and an interest rate of 6.8%, theinterest rate on your consolidation loan would be calculated as follows.The rate is then rounded up to the nearest 1/8th of 1%.($5,000 x 5.00%) + ($15,000 x 6.8%) / $20,000 = 6.35%rounded up to the nearest 1/8th of 1% = 6.375%If you have questions about calculating your consolidation interestrate, please contact a RISLA Loan Counselor at 888-758-7562. Theywill research your loan history and estimate your consolidationinterest rate for you.

 How often do student consolidation rates change?
The rates on federal Stafford and PLUS loans (excluding Perkins loans)disbursed between July 1, 1998, to June 30, 2006, have a variable interestrate that resets every July 1st.

This gives spring graduates time todetermine if consolidation makes sense for you. Begin the processof researching consolidation companies like RISLA immediately aftergraduation. Stafford loans disbursed on or after July 1, 2006, have a fixedinterest rate of 6.8%.

 What is a Private Student Consolidation Loan?
Private loans are credit-based alternative loans for families who requireeducational funding in excess of the amount allowed under federal loanprograms. The federal government does not guarantee thesePrivate Consolidation Loans and does not subsidize the interestrates. U.S. citizenship and credit history may affect eligibility.The following questions & answers are typical for most lender’s privatestudent consolidation loans. Be sure to inquire with all lenders you speakwith to determine their specific offering, eligibility and policies.

 What are the interest rates on Private StudentConsolidation Loans?
The interest rate for Private Consolidation Loans are variable and changeas frequently as on a monthly basis. The rate will be based on the PrimeRate or LIBOR. A borrower’s interest rate is determined by their creditworthiness.

 Are there any fees associated with applying for a PrivateStudent Consolidation Loan?
There are no fees to apply. However, an origination or repayment fee maybe charged if you accept the loan. Check with the lender to learn aboutany fees.

 Can a Private Student Consolidation Loan be paid offearly?
 Yes, there are no prepayment penalties.

 How long does a Private Student Consolidation Loantypically take to process?
 It is expected your loan can be complete in approximately 60 days.

 What personal information do I need to supply tocomplete my Private Student Consolidation Loan?
  1. Proof of income/employment
  2. Proof of other monthly income (if applicable)
  3. Loan payoff information
  4. Proof of identity  


 

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