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One of the toughest things many new graduates face when they earn their college degree is paying off their student loans. Graduates who had to continually take out loans during the course of the education can find themselves in deep debt and payments coming due, usually six months after graduation. There may be a glimmer of hope by reducing the monthly payments through federal student loan consolidation to lump all of the loans together and make a lower monthly payment.

For most students, the amount of the monthly payment can be reduced by as much as 53 percent and by applying before beginning paying back the loans, the low interest rate will last for the life of the loan. Additionally, loans accepted in the federal student loan consolidation program during the initial grace period can trim interest rates by .6 percent and there is only one loan payment to make every month. Depending on the agency that provides the federal student loan consolidation, there may not be any credit checks or fees associated with the loan approval.

A Stafford Loan federal student loan consolidation agreement will reduce the aggregate monthly payments by 53 percent and provide a fixed rate for the life of the loan. PLUS loans can also be consolidated into one loan with a lower monthly payment, but the stipulation is the loan total has to be greater than $20,000 to be eligible.

Graduate Students Also Have Consolidation Options

Students who consolidated their loans from their under graduate education and are now facing loans from their graduate education can receive federal student loan consolidation on their Stafford loans and combine them with the previously consolidated loans. This will allow them to make only one payment on the combination of all of their educational loans.

When seeking federal student loan consolidation options, it should be known that under federal rules, interest rates must mirror those offered by the government. However, there may be some allowable discounts from the lenders that drop the price of the loan. For example, a lender may offer a small discount for automatic payments from a checking account or on a credit card to reduce the over all cost of the federal student loan consolidation.

When looking into the loan rates, be sure you understand what the interest rate will be. Some lenders advertise what the federal student loan consolidation interest will be after all discounts. Since not every applicant will qualify for every discount, the rate received may be higher than the advertised rate.

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In most cases the loans people take out to pay for college will have to be paid back, typically starting about six months after graduation. There are some colleges and certain federal programs that allow for student loan forgiveness, but it is not going to be like apologizing to your mother for breaking a vase. In most instances, student loan forgiveness for all or part of the loan will require that certain criteria be met and the student meets the requirements for canceling the loans.

Many government loans for education can be reduced through different methods, such as volunteering, military, teaching or providing legal or medical services. AmeriCorps volunteer service allows for $4,725 to be erased from government school loans in exchange for a year of service. It also provides a cash stipend to help pay living expenses while away from home. Joining the Peace Corps can also help with student loan forgiveness at the rate of 15 percent of the loan for every year graduates spend volunteering.

Volunteers In Service to America, VISTA volunteers can receive $4,725 in student loan forgiveness for every 1700 hours in community service provided for non-profit work with the poor. There are also some ways that student loan forgiveness can be gained while being a member of the military.

Providing Services Where It Is Most Needed

Many low-income communities have trouble finding qualified teachers to fill their schools and student loan forgiveness for government loans are available for new teachers will to teach in certain schools. Most of these programs offer a 15 percent reduction in the amount of the loan in the first and second year teaching in a qualified school. Another 20 percent of the total can be dropped during the third and fourth year with another 30 percent cut in the fifth year, meaning that 85 percent of the loan balance can be forgiven after five years.

Many law schools and medical schools also offer student loan forgiveness if their graduates agree to fulfill obligations providing service to the poor or economically challenged residents in certain communities. In addition to receiving student loan forgiveness, they also receive valuable experience in real life settings.

Those students who do not qualify for student loan forgiveness may look at federal student loan consolidation if they received funding for their education from more than one source. Often consolidation through the government can reduce the monthly aggregate payments required on several student loans.

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Just because your credit score is way below the passing rate does not mean that you can no longer get a loan to finance your studies. There are many financial institutions out there that are offering poor credit student loan to people like you who are struggling hard to make both ends meet. The good thing about these financial institutions that are offering poor credit student loans is that these institutions understand your needs and they have personnel who can help you manage your finances. Moreover, since these institutions assume that your credit record is less than desirable, most of them will no longer subject you to some embarrassing credit checking. This means that you do not have to explain to them why you are broke and why you were not able to pay your previous financial obligations. That is such a relief isn’t it?

Getting A Poor Credit Student Loan

You need to do some research first before you get a poor credit student loan. Contact banks and other financial institutions. Ask the banks or financial institutions if they have some student loan packages for students who have bad credit and then ask how much the interest rate for this kind of loan is. Always remember that when it comes to poor credit student loan or any loan for that matter, the interest rate is everything. High interest rates can make your financial obligations more onerous in the long run. It is not uncommon for loan amounts to double within a few years because of high interest rates. If you don’t want to end up paying a lot more money than you should, you must make it a point to get loans with the lowest interest rates.

Compared to regular student loans, poor credit student loans normally have higher interest rates. This is really understandable because banks and financial institutions expose themselves to higher risk when they lend money to people who have bad credit history. However, the good news is that there are ways to lower down the interest rates of poor credit student loans. One of the best ways to get lower interest rates on your poor credit student loan is to have a co-singer of the loan. Your parents or any of your close family members can sign the loan with you to ensure that you will repay your obligations on time. Most banks and financial institutions are willing to lower down their interest rates when somebody co-signs the loan.

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