Are you sick of paying interest on your monthly student loans with no end in sight? Afraid of cash-flow problems that may prevent you from paying your student loans on time? I know I was and there is a solution to this problem. It is called student loan consolidation.
Tip! With student loan debt consolidation, the debt is usually discharged at the death of all borrowers. So, you won’t be leaving an unnecessary burden behind on your co-signers or family members.
Student loan consolidation simply means consolidating all your student loans into a single loan with a monthly payment plan. Effectively, all your previous student loans are written off and a new student loan is created which you have to pay off monthly.
Tip! In school consolidation arrangements. Student loan consolidation can help ease the burden of several monthly bills.
Here are some of the benefits of student loan consolidation
1. Lower monthly payments
By consolidating all your student loans into one loan, you only need to pay off one loan monthly instead of several student loans monthly. Thus, your monthly payment is lower
2. Pay only one loan monthly instead of several student loans monthly
It is a lot easier if you have to manage only one student loan instead of several student loans with different payment deadlines. Also, sometimes with many student loans, you may ended up forgetting to pay one student loan.
3. Low, fixed interest rate
By consolidating your student loans, you will be able to take advantages of low, fixed interest rates. Currently, by law, student loan consolidation rates cannot exceed 8.25%. Furthermore, national interest rates are at a 40-year low therefore this is a good time to get one.
Tip! The most useful forms of student loan programs are the Stafford and Plus federal loan programs, so you will need to establish if the prospect lender is part of the Stafford and Plus programs.
4. No credit card check or processing fees
No credit card check is required during the application of a student loan consolidation. The payment plans and terms are usually quite flexible in that they can customize it according to your financial standing.
5. Make monthly student loan payment electronically
While it is not necessary to make payment electronically, most lenders will knock 0.25% off your student loan rates if you make payment electronically. Also, using direct debit from your bank account will prevent you from forgetting to make a payment.
Sometimes it can get quite confusing as to the qualification of applying for a student loan consolidation. The official stand from the government is that students who are still in their grace period or who are still studying in school may qualify for government student loan consolidation
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.
The government student loan consolidation nowadays are quite competitive compared to private sector, therefore I would recommend going for a government student loan consolidation. With so many benefits of getting a student loan consolidation, it is quite obvious to save money in the long run is to get one.
Tip! Extending Your Payment Period. You may have a lot of student loan debt.