Government Debt Consolidation Loans – Update

s.tarryn asked:


I have a lot of debt (credit cards, student loan, mortgage) but a decent credit score (about 690). I have never missed a payment but i cannot get approved for a consolidation loan because I have “excessive financial obligations”. We haven’t owned our house for very long so there is not much equity in it yet. We are paying out the nose on our cards and I just want to lower the payments so we are not living paycheck to paycheck. Does anyone have a suggestion?

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Amy B asked:


I had several student loans from various lenders for my undergraduate and masters studies. Because I was tired of paying many payments each month to different lenders, I rushed into consolidating without knowing the facts. Now I am stuck at a much higher interest rate and will end up paying 30-40% more in the end!! What are my options at this point??? How can I get myself out of a bad consolidation?

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b.cisneros84 asked:


Currently we are in debt about 100,000.00 and my husband in the only one who works. we have two trucks we are paying for about 30,000. each. credit cards, consolidation loans, student loans. no mortgage, no air to breath. out of all the paycheck we only get left with less than 400 for a family of 3. We are considering bankruptcy but don’t know much about it. Which is it 7, 11, or 13? How long does it ruin your credit for? Can we fix it later? Help . thanx

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Jones asked:


I just recently lost my job and I am living with my parents. I want to combine two credit cards, student loan and two car payments.

Is there a way that I can apply and get approved for consolidating my debt if I have nothing in my possession for collateral?

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aimsterrr asked:


Yes, it’s true. I fell for the gimmicks and ended up with a few credit cards with all types of debt as well as a student loan. The majority of my debt is school related (books) or auto-repair related (tires, batteries, brakes, misc.). I have been kind of doing the whole college thing by figuring it out myself and wasn’t aware/no one told me student loans were a better choice than credit (my fault) until it was too late.

I’ve graduated from a 4 year institution, one more year of taking classes, then will be headed to California in Summer 2010 to get a house/apt/condo with a friend and get my teacher credentials at CSU San Marcos so I can teach elementary school.

A: How can I REALLY start paying off this debt (aside from starting with paying for everything in cash/with debit like I’ve been doing)? I am scared I will never be able to pay it all off. What are my other options beside debt consolidation which I’ve read can really mess up your credit?
B: With this much debt, what is the likelihood that my friend (has little to no debt) and myself will be able to get a place relatively affordable while we are both going to school (especially if either of our parents can/need to cosign)? We want to live between Oceanside and San Marcos in North San Diego County if that is helpful or possible.
C: Any other financial advice given my situation?

And please, avoid cutting remarks about my “naive collegiate/financial stupidity”. I’m well aware of the consequences for my choices and you should keep in mind I have had little to no help in making these decisions because neither of my parents went to college/are financially savvy. I do feel foolish, and am simply asking for help/advice.

Anything would be greatly appreciated.

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Christa Kowalczyk asked:


One of the best investments that a person can have in his life is education. You have to pay for that high college education so that you will be able to get higher paying job. Most students avail of these student loans available to them and that suits then. But many of the people hesitate to consider student loans because of the interest that these loans incur through time.

A solution to this is student loan consolidation. Your federal student loan can be consolidated just like your personal student loans. You have to keep in mind though, that your federal student loans and your private student loans must not be consolidated into a single student loan debt.

To have your loan consolidated, you have to make sure that you have $5,000 balance. A six month grace period is given after you finished studying if you want your student loans to be consolidated. If you are already paying for your student loan you can still go for a debt consolidation for your student loans. If you have federal student loan, you can apply for a government student loan consolidation.

In order to qualify, you should have taken more than one federal student loan. A good credit rating can qualify you for a government student loan consolidation. Also, you can make your payment easier and more efficient. You can consolidate your subsidized and unsubsidized student loans amortizations. This will enable you to pay in a single transaction every month.

The benefits of a consolidated government student loans are endless. In this way, you can manage your payables more efficiently. You do not need to exert a lot of effort in paying the scheduled fees for several loans.

All you have to do is consolidation it a single payment for the entire loan while you were still in school. One best attribute of these government consolidated student loans is that, you can pay your student loans over a certain period of time that is long enough compared to private student consolidation loans available. In connection with this set-up, you are only obliged to pay a smaller amount every month in a staggered mode. The monthly payment bill is calculated with the interest rate, repayment duration and the total loaned amount.

The repayment time for government student loan consolidation can be as long as 30 years. Despite the smaller amount you pay for the repayment period, you are advised to pay the entire amount as soon as you are able to otherwise, interests add up as you prolonged your full payment.

Low payments, low interest rate and easy payment method are just some of the benefits you can find with government student loan consolidation. Interest rates for student loans are at its lowest percentage. Thus this is the best time to take student consolidation loans for a college degree you are dreaming of.



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Ben Xenoo asked:


Alternative student loans bad credit are still available. In some countries, especially in the UK student are almost expected to run up big debts whilst completing their degree courses. Many students leave university at the start of their working life loaded with debt.

Much of the world is going through a financial crisis. Banks, for perhaps the first time ever, are refusing applications for credit from those who do not have perfect credit histories.  It has never been harder to secure credit from the banks and that is a fact.

So what chance has a cash strapped student loaded with debt got of being approved for credit? Well in some cases students are treated as special cases. Some lenders realise that students have had to run up debts simply to complete their courses. In the UK government students loans are only repayable if the student has a job at a predetermined salary level. It is a fact that many students will never repay any of the government student loan. Lenders realise this and although the student may owe thousands from a government loan, many lenders will be happy to approve a credit application when the student starts his working life.

For students with more sever debt most of the banks will not offer credit. There is though almost a new industry of new lenders who will offer credit to those with a poor credit score. You will pay more in interest from these lenders so it is best to shop around.

Ensure though that you can afford to make regular repayments because if you default on a credit card from a  “bad credit” lender you could damage your chances of securing future credit long term.



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Jack Sinclair asked:


With interest rates rising, and your repayments on your variable rate student loan rising, you might be wondering if a consolidation loan would be a good idea.

Right now, the sub-prime mortgage crisis is causing a lot of problems for a lot of people. Rising interest rates mean the mortgage payments are rising, and many people are no longer able to meet the minimum required payments, so financial institutions are foreclosing, evicting people, and selling the homes for whatever they can.

Tempers are getting so bad, that evicted owners are starting to vandalize their own homes – ripping out toilets, destroying electrical panels, and defacing walls and fixtures that can’t be taken. It has gotten so bad, that companies like Prudential are now offering incentives to evicted homeowners to leave the home in selling condition.

So, what does this mean for you and your student loans? Well, the financial institutions make their money on an interest-rate spread – the difference betweeen what they pay to to Federal Reserve, and the amount you pay to them. So as long as the spread is positive, they are making money, and everyone is happy.

This means that a new consolidation loan would be taken out at a new, higher interest rate (since rates are going up), and the only way you could pay a lower net amount is to change the terms. You will be able to reduce the amount you pay by extending the time you take to pay the loan off.

Note: student loan consolidations can renew your deferment choices if you have already exhausted the deferment options on your existing federal student loans. A student loan consolidation can significantly reduce your monthly payment burden. Consolidation allows you to stretch your repayment period from the standard 10 years to up to 30 years, depending on the total education debt. Student loan consolidation programs allow for a borrower’s loans to be paid off and a new consolidated loan created. These programs simply loan repayment by combining several types of Federal education loans into one new loan.

Interest rates for variable student loans are reset on July 1. In the past two years, rates have risen from historic lows, but this year the rates will remain the same. Rates will rise from 3.37 percent to 5.26 percent for student borrowers already making payments.

If you are thinking of defaulting on your student loan, be very careful, because there are big penalties for non-payment on a student loan, especially a federally guaranteed one.

If you wish to pay down your loan quicker, there are ways to avoid pre-payment penalties. If you are getting a first time educational loan, there are places that can help improve your odds of getting accepted.

A consolidation loan is not the best option for everybody, but in many cases, it can help lower your overall expenses, and give you a bit extra money each month, to help with the things that are important to you now.



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Tom Kranz asked:


Fortunately there is a silver lining to the dark clouds here – the debt consolidation loans for bad credit, which would be able to give back your mental peace and financial solvency. Once a credit card holder falls behind in payments, he or she can become burdened with mounting debts and thus must need to find a solution for his problems or face dire consequences. Most people find it highly addictive to charge expenses to their credit card and enjoy a life style that would otherwise be outside their purview.

It is not so much that their heart is in the right place that makes them offer non profit debit consolidation as it is the amount of their expenses that restricts their profit. Student debt consolidation gives you the opportunity to make one single monthly payment that is usually significantly reduce than the combined amount of unconsolidated bills and allows for a single interest rate that is usually reduce than what may be found on each individual bill of unconsolidated loan. Sometimes people may want to do an unsecured debt consolidation loan to bring all of these little payments into one big payment. The best way to address consumer debt consolidation is to isolate the debt and eliminate it.

Is it Debt Relief, or is it Bankruptcy?

In fact, many of the advertisements selling information on how to get out of debt legally, are in reality advertising for bankruptcy, which is under the auspices of the federal government but is not a grant program. It can however be a great help to getting rid of very old debt. Bear in mind that bankruptcy will all but destroy your credit rating.

Focus on your most expensive credit cards with your debt consolidation loan. Once you have paid these off you can probably eliminate the accounts and never use them again. Go to a bank or credit union and tell them you want to talk to them about their debt consolidation program to get some ideas on the interest rates and monthly costs. Make sure you can afford the repayments and that you deal with the most expensive cards first. The default is reported by the crediting company and your credit score would decrease with every such comment recorded. You would be solvent again.

In most cases they would be able to freeze the interest, reduce and even waive part of the compound interest charged – thereby providing you with great savings as well. The fourth major benefit is that you would be saving a lot of money while you are liquidating all your loans.



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