If you are buried under a mountain of debt because of your student loans and you spend so much on your monthly payments that it interferes with your ability to pay your other bills or have any money left for entertainment, then you should think about consolidating your student loans. There are many benefits to consolidating your student loans and it could just help you to gain control of your financial situation and make life a little easier for you.
Payments are lower: When you consolidate your student loan payments, your monthly payment amount will be lowered, sometimes by as much as 50%. The reason for this is because the life of the loan is longer so your payments are spread out over a longer period of time. Another reason your payments might be lower is because of the lower interest rate you will get with a larger loan.
Payments are easier: It is much easier on you to keep track of and pay off a single loan than it is to pay on multiple loans that you have acquired over the span of your college career. Plus the payments are easier since they are less each month.
Consolidation loans are easy to apply for: There are different plans available that can be customized to your particular situation as far as payment amounts and years of the loan go. In addition, you may not even have to have a credit check or pay processing fees, especially if you take advantage of a government consolidation loan. They are also easy to qualify for and you can even consolidate while you are still a student and receive an additional several month grace period.
Gives you peace of mind: After you graduate from college you have plenty on your mind with trying to start a new career so consolidating your loans and enjoying a grace period and lower payments can be a big help to you financially.
Rates are competitive: Student loan consolidation loans can be obtained from the government if you have the right type of loan to qualify for it. Getting your consolidation loan from the government means that you will get low interest rates. Even if you take a consolidation loan from the private sector, you can still find good rates since this is a very competitive market and the banks and finance companies are trying to win over your business.
You may pay out more for your loan: One draw back to consolidating your student loans is that since you will be drawing out the length of your loan you might also have to pay more. It will be up to you to decide which is more important; having lower monthly payments or paying less over the life of the loan.
There is no getting around that fact that if you took out student loans, you will have to pay them back. This might turn out to be a difficult thing to do if you are still in school, or when you start a family, or even years down the road if you lose your job.
All those student loans may mean that you don't have enough money to start saving for a house. Maybe you can't even pay your bills or you don't have enough money left over each month to enjoy life. It doesn't make sense to continue to run up debt on your credit cards each month and get deeper and deeper in the hole just because you are juggling several student loans. Yes, the do have to be paid back, but you should take the time to figure out the way to do it that is best for you and your financial situation; and that might just be to take advantage of a student loan consolidation.
The money you take out on your consolidation loan is used to pay off all your other student loans and they then show up as paid on your credit report which might improve your credit score. The most important thing for you though is that consolidating will lower your monthly payment making it easier on your budget.
There are different types of consolidation loans you can take advantage of and it really all depends on your particular situation. You can select a loan that has a set monthly payment that is spread out over 10 to 30 years. Or you can take a consolidation loan that has payments that increase every two years so that the payments are less as you are just entering the workforce and starting out your new life on your own.
You can even select a consolidation option which takes into account your annual income and family size. Lenders have set up these programs to make it as easy on you as possible to make your payments in a timely manner. The lenders for student loan consolidations are both from the private sector such as banks and also from the government. In order to get a government backed consolidation, you need to have loans that originated from government programs initially. A government student loan consolidation will usually provide you with a lower interest rate.
Consolidation loans are easy and painless to apply for and qualify for and could make a real difference to your finances by lowering your monthly payment.
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