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Student Loan Consolidation and Deferment

Student loan consolidation is widely discussed concept in all the loan consolidation forums, TV talk shows and personal meetings. Another concept deferment is also associated with student loan consolidation. Deferment refers temporarily stop making payments on your student loan. Student loan consolidation and deferment has a link that we tried to disclose in this article.

When you consolidate your several student loans into one loan, you agree to pay certain amount of money monthly to your lender. But you may never know whether you will get unemployed or lack the necessary income in the future. For this type of situation the clause of deferment is included in the contract of student loan consolidation. If you are unemployed or facing economic hardships, you can exercise your right of deferment of student loan consolidation.

You can request a deferment for a period of one year at a time. Actually you are entitled to get three years deferments in the complete life of loan. But at a single time maximum period of deferment can be one year. In order to get deferment on your payments, you will have to fill a deferment form. If you meet the eligibility criteria, your payments of a year or the period mentioned in your application will be deferred. It means you will not have to pay the monthly payments to your lender in this period.

Interest on the loan continues to accrue even in the period of deferment of student loan consolidation. Some students, who show good performance in their universities, qualify to get subsidized student loans. In their cases as well interest accrues in the period of deferment but government of United States of America pays this interest on behalf of students. But in normal cases student themselves have to pay this interest. Interest of period of deferment of student loan consolidation is calculated and added in the principal amount of loan.

All the schemes of Federal Student Loan Consolidation Program provide option of deferment to the students. Some Private Student Loan Consolidation Programs also offer student loan consolidation and deferment.

It is our most sincere advice to payoff all our debts as quickly as possible. But if you are facing adverse financial condition in which it has become impossible for you to make the monthly payments, a deferment will be a reasonable alterative to provide borrowers with temporary relief from their debts. When you get deferment on student consolidated loan, you do not need to pay late payment charges.

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