It can require several student loans to cover the costs of higher education. The result can be a confusion of payments, various interest rates, and high monthly payments. Step in the creation of the student loan consolidation program.
Here are the advantages:
Fixed Interest Rate. When you consolidate your student loans, you are able to bring them all in to a fixed interest rate. This can be a great advantage if the current going interest rate is lower than the interest rates you’re currently paying on your loans. Additionally, you have the comfort of knowing your interest rate wont change over time.
Lower Monthly Payments. The standard rate for most student loans is 10 years. However, when you consolidate you can extend your payments up to 30 years. The benefit of this is that it enables you to make lower monthly payments. This can be particularly helpful if you are new to the workforce and just beginning to make a salary. You don’t have to take the full 30 years to pay off your loan, you can make early payments. However you can also take advantage of the lower payments when money is tight.
Only One Payment Each Month. One apparent benefit of consolidating your student loans is that you only have to worry about making one payment, rather than several. This makes bill paying much less stressful and you don’t have to worry about missing a payment, or adjusting your cash flow to accommodate several withdrawals.
Save money in the long run. Lenders predict that if you consolidate $20,000 in student loans you will save almost $77 a month and more than $900 annually. Over the life of your loan that is a lot of savings. It is also a lower monthly payment and a lower interest rate. Additionally, many lenders will give you an interest rate cut if you sign up for automatic payments. This option is beneficial both for your lender because they are more certain to get their payment on time and for you because you get a better interest rate and you don’t have to worry about making sure the payment makes it on time.
Consolidating your student loans can be an excellent way to save money, stress, and time paying back your debt. Visit your federal loan website and inquire about debt consolidation. They will be able to answer many of your questions as well as help point you toward the first step in the process.