Benefits of Student Loan Consolidation

Education is getting costlier day by day, and most of us who decide to go to college find ourselves leaving our alma mater with not just a degree, but a huge load of student loans as well. Paying off a number of student and education loans, along with a possible car loan as well as numerous credit card bills gets a little bit too strenuous and tough to manage for someone who has just taken up his or her first full time job. Most student loan repayment plans are calculated keeping in mind a high potential salary, which one might start getting at least three to four years after leaving college. But when it comes to paying off your loan the moment you are out and working, the best of us find ourselves over loaded and over burdened with our collection of student loans, and a number of people resort to defaulting on their payments and spoiling their credit history. Going in for a student loan consolidation is the best method of dealing with student loan related payments and problems.

What is Student Loan Consolidation?

Most students apply to numerous agencies for student loans, and these loans are provided at different rates of interest and with different installments and repayment plans. When you go in for student loan consolidation, then all these individual loans are clubbed together into one large loan, which is paid off by your student loan consolidation agency. As a result of this, you are left with only one monthly repayment that you make to the company that consolidated and paid off your student loans. A student loan consolidation saves a person from a lot of hassles as well as saving money and time both.

Advantages Of Student Loan Consolidation

When you go in for a student loan consolidation, you invariably end up paying lesser than what you were paying earlier. Depending upon the kind of lender and plan you chose for your student loan consolidation, you might find yourself paying almost fifty per cent less than what you were paying monthly for your numerous loans.

Life gets much simpler when you consolidate your student loans. Instead of paying off numerous lenders who all wanted different amounts at different rates of interest, you are left with a single monthly payment to make. You thus have more time to spend on your budding career.

Student loan consolidation programs generally have a much lower rate of interest than what you would be paying on your multiple student loans. The rate of interest is calculated based on the weighted average of your multiple student loans, and a student loan consolidation company can charge a maximum interest of 8.25%. On top of this, many federal student loan consolidation companies offer fixed rate of interests throughout the term of the loan, which can extend up to thirty years!

A student loan consolidation program offers extremely flexible repayment programs when compared to your individual student loan plans. On top of this, you can pay off your consolidation loan over an extremely long period of time, extending up to thirty years.

A longer repayment plan instantly reduces your monthly burden, so you have a lot of leeway to adjust your finances comfortably. However, keep in mind that the longer you take to pay back your consolidation loan; the more you end up paying over and above your original loan amount because of the huge sum that you will pay as interest.