Myths and Facts of Student Loan Consolidation: Final Part

Myth: As long as I'm in school, I cannot consolidate any of my Federal student loans until I graduate or leave school. Fact: Not entirely true. If you are in graduate school, you can consolidate your undergraduate school loans. Also, if you're in a post-graduate program, such as medical school or law school, you can consolidate your undergraduate and graduate school loans!

Myth: Even if I have a high interest rate but I’ve already consolidated before, I can’t consolidate my student loans again to take advantage of a low fixed rate.
Fact: Not true. You can reconsolidate if you either received a new eligible loan since the consolidation or have left an eligible loan out of the original consolidation.

Myth: Student Loan Consolidation will hurt my credit rating.
Fact: Not true. If anything, Federal student loan consolidation may help your credit rating, so that you can have the ability to obtain additional credit for things like a mortgage or a new car!
When you apply for any form of credit, such as a mortgage loan or credit card, lenders will evaluate your credit score as part of the application process. Your credit score takes into account the number of creditors you have as well as the balance of outstanding loans. By consolidating your student loans into a single loan, you can effectively decrease the number of creditors on your credit history, thereby enhancing your overall credit score.

You’ll be happy to know that at most student loan companies, there are no credit checks!

Myth: The word “consolidation” is frowned upon in the credit industry.
Fact: Not true. There are two types of consolidations in the credit world. One is consumer debt consolidation and the other is a federal student loan consolidation. Each is very different from the other. Consumer debt consolidation is usually meant for people who have had trouble paying off their bills and can really hurt their relationships with their creditors. Student loan consolidation, on the other hand, doesn’t hurt anything. No relationships are harmed because, by consolidating all your federal student loans, lenders will be paid in full and one single new loan (a consolidation loan) will be issued in its place. In fact, your credit rating may actually improve after you consolidate!
If there’s one good thing that the government has given the American student, it’s the option of student loan consolidation. If there’s anything a student should consider after graduation, it’s student loan consolidation.

To learn more about student loan consolidation visit http://www.onesimpleloan.com/loan_consolidation.asp