Types of Student Loan Consolidation Programs

College students graduate with different degrees in different academic disciplines. Chances are, they also graduate with extremely different student loans. Depending on your existing loans, your consolidation options could change. In fact, the types of loans you currently have could make the best student loan consolidation company for you different than you might expect. Here are some of the types of loan consolidation programs available. Remember that not all consolidators offer all these programs, and some could offer variations of these programs. Review all terms and conditions before selecting any consolidation program.

• Federal or private: Generally, federal student loans cannot be consolidated along with private student loans. If you have both types, you might end up with two consolidated loans - one private and one federal.

• Standard loan consolidation: If you choose a standard loan consolidation program, your new loan will be very similar to your previous student loans. Your new consolidated loan will have a fixed payment with a 10-year term. Borrowers who are eager to repay their loans quickly find this an attractive program. But if you're concerned about a high monthly payment, or might not have the income to support a 10-year term, you might want to consider another option.

• Extended loan consolidation: An extended consolidation program is just as it sounds - you will repay your loan in an extended period of time. Rather than the 10 years you had to repay previously, an extended loan can stretch that time to as long as 30 years. The repayment term can vary by lender, so be sure to review the proposals before you select the program. Borrowers who want to have lower monthly payments usually prefer this type of consolidation program. Also inquire as to whether there is a prepayment penalty associated with this program: Remember that the longer it takes to repay your loan, the more interest overall you also will pay.

• Graduated loan consolidation: If you select a graduated repayment plan, you will have lower monthly payments for the first few years, then your payment amount will gradually rise as time goes on. Borrowers who are starting a new career may like this option, as their payments increase along with their income. Be sure to review terms and conditions, as well as interest rate(s) and penalties associated with this type of loan consolidation.

• Income-dependent loan consolidation: Borrowers usually select an income-dependent consolidation program if they are anticipating changes to their income. In this plan, your monthly payment is based on your present financial status. So the more you make, the more you are obligated to pay. Conversely, if you earn less, your payment will be less. Not all lenders participate in programs like this, so be sure to ask questions about all the programs available to you.