A college education is one of the most significant investment in a person’s life but it is also one the most expensive needs.

The publicly reported tuition fee by private colleges and universities for the 2007-2008 is about $50,000 a year. Last academic year, more than $78 billion was used for student loans, both federally as well as private.

Find the best student loan consolidation

Student loan consolidation helps you to bring together all student loans into one single loan so that you can pay a lesser monthly payment and have a better monthly cash flow.

Federal student loan consolidation is one such student loan consolidation which is very cost effective.

If you are interested in opting for a best student loan consolidation, you need to have the following eligibility:

• You need to be a student or parent having federal loans which haven’t been consolidated as yet.

• You are either still studying in a college and would be graduating within next six months or have already passed out of school and are replaying your loans.

• You have more than one lender holding your loans with a total loan amount exceeding $15000.

When you opt for student loan consolidation, you can reduce your monthly student loan payment by about 60 percent. The most important aspect for choosing a best student loan consolidation is to choose the right lender and the right interest rate. While choosing the best lender, you should look for payment fees, interest rates and loan terms.

The beauty of student loan consolidation is that you have one fixed interest rate that is dependent on an average of your loans’ current rates. You need not worry about paying more when the interest rates increase, which is a common risk among variable-rate loans such as the Stafford or PLUS.

Reasons to consolidate

You need to have student loan consolidation to lower the monthly payments or to save your money over a period of time.

If you want to reduce your monthly payments, you can increase your repayment period for over 10-year term which is common among federal student loans. By doing so you will land up paying more interest as you will be making payments for a longer length of time.

Federal Consolidation Interest Rate

Federal Consolidation interest rates are dependent on the average of student loan interest rates. Federal student loans distributed on or after July 1, 2006 have an interest rate of 6.8%. These interests rates change every year but will never increase above 8.25%. Federal student loans given before July 1, 2006 will remain variable interest rate loans. These loans will change every July 1 based on the results of the 91-day Treasury Bill.

Parents usually find it difficult to finance their children’s education if they are in bad credit. A few student loans can help parents to get over this problem. For the students attending or are in the process of attending college, student loan help in paying their tuition fees.

Similarly, a student loan for parents is tailor-made for their needs to provide proper higher education for their children. The loan is offering in the name of the parent either through a state or government financial body.

A common parent student loan is Federal parent plus plan which provides monetary support to the parents whose children want to pursue higher education. This loan is offered based on the financial status, credit history and income of the parent.

Another option is the Stafford loan for parents which don’t require any credit limit. If the student is eligible for financial aid or scholarships or subsidized loans, he/she can opt for it. Parents can even cosign for their children’s student loans in spite of being in bad credit, if they have steady income and a proper employment record to compensate for any credit problems.

Being a cosign for a student loan can help a parent in spite of being in bad credit because lenders can analyze that they are backing their children and might even offer lesser interest rates and processing fees.