Student Loan Consolidation like refinancing a mortgage is a suitable way of repayment. With this, you can combine your student loans into one big loan, therefore, lessening your periodical payment.
In consolidating student loans, very low rate of interest applies along with a long repayment period. The monthly payments are cheaper as compared to the original student?s loan. Before Consolidating student Loans, take into consideration the three factors: Interest Rate, Credit History and Online Calculators.
Well, you finished study. Your interviewing went well and you are starting your first real job. Now you will have to start paying back those student loans. Should you consolidate?
With a bit of luck you were able to qualify for more free financial aid and less student loans in the process. If you were careful to keep education expenses down by using multiple cost reduction strategies, you probably have less student loan debt than the average graduate which is currently about $24,000. If so, congratulations. Here are some issues to consider when looking at consolidating your student loans.
Consolidation Benefits And Tips:
One Payment Versus Multiple: One of the best features of a student loan consolidation is that you will be able to make only one monthly payment for the remainder of your loan. If you took multiple student loans over the years, possibly from different lenders and with different interest rates, a consolidation will streamline your loans and average your interest rate into one payment.
Discuss Your Terms: Based on your loan balances, current income, job stability and future advancement potential, you can arrange to pay your loan back over a shorter or longer period of time. When your loans are reviewed for consolidation, ask if there are any incentives or rebates for consolidating. If you have a small balance on a higher interest rate loan, consider keeping this separate and paying it off first which will enable you to lower your other loan rates upon consolidation.
Automobile Debit Program: Many lenders will offer a.25% to.50% interest rate reduction if you elect to have your loan payments automatically deducted from your checking, savings or brokerage account.
On Time Rate Reductions: Some lenders will also offer a.50% to 1.00% rate reduction after you have successfully paid 36 months of on time payments.
Private Versus Federal Loans: If you were forced to take private student loans in addition to your federal loans, you may want to keep them separate. Private loans have less government oversight than your federal student loans, so if you blend them together upon consolidation, you are now bound by the stricter federal guidelines on the entire new loan. This may be detrimental if you run into a financial hardship in the future.
Conclusion:
Student loans are becoming a larger part of life for most college graduates these days. Consolidating student loans can make your life, record keeping and finances easier to maintain.
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