Consolidating education loan


28-Mar-2016 09:23

Here's what you need to know before deciding to consolidate student loans.

Loan consolidation is when a borrower takes out a new loan to pay off several smaller student loans.

Debt consolidation is the process of taking out one loan to pay off two or more unsecured debts.

Perkins Loans are federally-guaranteed student loans that are issued jointly, by the U. government and individual financial aid departments at colleges and universities.

Under certain circumstances, federally backed student loans – such as Direct Subsidized Loans and Federal Perkins Loans – can be discharged or forgiven.

The prospect of your student debt evaporating may seem like a dream come true.

Student debt has reached an all-time high in the U. of late, with an estimated 40 million people now owing an average balance of ,000, according to credit report company Experian.

With student loans soaring, debt-saddled students and graduates are desperate for any strategy that may help them escape their burden.

Instead of making multiple payments to multiple lenders, the borrower only has to pay off the new consolidation loan, says Michelle Pezzulli, vice president of operations for Credit Union Student Choice, a student lending service provider in Washington, D.