Consolidating your student loan(s) is one of the smartest things that you can do. You should consider a student consolidation loan if you have several federal student loans or even just one large one.
Student consolidation loans will have fixed interest rates which are similar to those of the loans that are being consolidated. The amount that you can save through consolidation can be up to 58%.
Tip! The third option is the Graduated Repayment Plan. This is another direct student loan consolidation plan with a repayment period between 12 and 30 years.
Federal Stafford loans, Federal Direct Loans, Federal Perkins Loans as well as many others can be consolidated. Most of the time, they already have low rates.
Tip! New Interest Rates. With a new student loan consolidation, you may be able to get a much better interest rate.
You will have a single loan payment which is often lower than what you currently pay.
When you consolidate, make sure that the interest rate that you are offered is lower than your current rate. You want to pay off your student debt easier and maybe quicker too.
While consolidation can simplify the loan repayment process and lower your monthly payment, in the long run it usually increases the total amount that you will have to pay.
Tip! Evaluate which lender provides the lower interest rate. The student loan consolidation is the best option since it helps you save thousands of dollars.
Student loan consolidation provides lower monthly payments by allowing you to spread the loan over 30 years in some cases. You are paying more payments, so be sure to compare the total cost of repaying your unconsolidated loans with the cost of repaying them through the consolidation loan.
The process of consolidating is very flexible. Consolidation is available from before you graduate down through years of repayment.
First, you need to gather information about your current loan. You need to know the balances and the interest rates, the names and addresses of companies and the names and addresses of personal references. The National Student Loan Data System can help provide you with the information that you need since it holds the most complete and accurate information for federal loans.
You will have 2 options to pay these loans back.
2. Pay a standard amount each month. This will include principle and interest. This is the lowest cost of interest paid way to go.
Tip! Know if the lender will be able to extend your payment period. With student loan consolidation you will be able to lower your monthly payment and at the same time extend your payment period up to 30 years.
2. Or a graduated repayment. Here you start with lower payments that are only interest, but then they will keep increasing.
Usually repayment of your consolidation loans will begin in 60 days and will take from 10 to 30 years to fully pay back.
There are some questions that you should ask the lender before going forward.
To get a student loan consolidation, you can still be enrolled in school or graduated. Either way, you’ll find many lending options that will fit your needs.
Tip! Avoid loan consolidation if your student loan is almost paid off, consolidating loans later on can mean ‘resetting’ the loan process, meaning you’ll pay more interest.