Student Loan Consolidation

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Most of lenders are offering a rebate for loan consolidation program especially for college or university student. According to “single holder rule” borrower is granted to merge their existing debts or loans with any financial institute or bank they wanted to. However, since the original lender does not want to loose their existing customer, so they will offer a good and attractive rebate/discount to their customer, so they will stay with them.

As we can see here, the rebate for loan consolidation is actually comes from the same financial institute/bank that provides a loan for the student so they could make more profit in long run rather than only from the loan itself. It looks like they are going to loose some money when they are offering rebate or discount for consolidating your loan. But, in fact they are making more profit from the process. The only matter is time.

However, I may say that this is a win-win situation, which two parties are both going to get an advantage and benefit. Borrower/student will get rebate of their loan and does not need to find another bank to process their loan consolidation. On the other hand, original lender/bank will get more profit from the newly consolidated loan and this is going to attract more customers as well.

Typically, original lenders are going to offer these privileges/advantages to their customer (student) for loan consolidation such as:

1. Reduced interest rate
2. The last 6 months installment are waived
3. Interest reduction in principal amount
4. More flexible payment option provided

So, if you are planning to consolidate your loan after this, I suggest you to check with your original loan provider first before getting to the other bank. If there is student loan consolidation program provided, ask them for quotation and check whether if you will get an advantages / benefits from it or not. You could save some money if you can get a rebate from your lender if they provide a loan consolidation service when you are graduated soon. So, I hope this blog post could give you some useful information… cheers.

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