Student loan consolidation is a program offered to borrowers in order that they can pay a debt at a discounted amount. Lenders will normally purchase and close such debts at a low interest rate and will offer a longer period than the standard ten-year payment period. The longer period offered by these lenders will normally give the borrower a chance to save for other debts. The extended period of time will also make it easier for the borrower.
Federal education loans do not attract any penalty and therefore student debt consolidation will not subject the student into any form of prepayment penalty. In case the borrower decides to pay some amount in advance, they should write a letter to the lender indicating it as being an advance payment. In case this is not clearly indicated the lender might treat it in a different manner. A prepayment will normally reduce the principal amount without any interest included.
The amount to be made monthly is normally determined by several parameters. The debt consolidation calculator will help an individual to know if the student loan is the only option available to them. It compares the amount payable during the standard ten-year period and that paid after combining several debts. Before one can combine the different debts it is important that they consider the benefits offered by the current lender.
Though there are other options available, combining all the education debts stands a better chance in doing away with such debts. It will be wise for such an individual to consult a financial adviser who will advise on other option available, their pros and cons.