(1) Standard Loan Consolidation:
This allows a repayment of a fixed monthly installment calculated at a fixed rate of interest over a period of 10 years. At a time the student is employed, this method affords a very convenient and uncomplicated mode of payment in that the monthly installment can be fixed at an affordable amount according to his ability to pay and without any surprises due to fluctuations in the amount payable monthly.
(2) Extended Repayment Plan:
This scheme is very much similar to the Standard Loan Consolidation, but offers a much longer 25 to 30-year repayment program. Due to the very long extended repayment period, the interest charges incurred could be very high.
(3) Graduated Student Consolidation:
This scheme has been devised having in mind especially the students who get employed immediately upon graduation. In this program, there is a graduated scale of repayments starting from very low and thereafter increasing in slabs at 2-year intervals. This scheme presumes that the graduate employee will receive increments in his pay sufficient to keep pace with the gradually increasing monthly installment every 2 years. The repayment period may vary between 15 and 30 years.
(4) Contingent Plan:
This is a very complicated system where it is necessary not only to get the income / expenditure details annually of the student / applicant, but also of other members of his immediate family as well. All this data is processed in arriving at an ideal monthly repayment amount annually. Since this is a very tedious and a long process, a student may go for this scheme only if he fails to qualify for any of the other 3 schemes detailed above.
Just a final word of caution. Remember that you are going to sign a legally binding agreement and that repayments will have to go monthly as agreed. Another important point to remember when consolidating is, if possible, to go to the same lender from whom you had taken the earlier loans. Do your research thoroughly this time and don't forget to read all the fine print on the reverse of application / agreement forms. Remember that you are in this present difficult situation because you did not apparently exercise sufficient care to study all the implications / advantages / disadvantages of taking different types of loans as well as from different lenders - when taking your earlier college loans. So this time let not the cure be worse than the diseases. Take sufficient care in selecting your loans wisely.