What is Student Loan Consolidation
A student consolidation loan is a typical loan that allows you to pay for all your student loans under the guidance of one lending institution with a much lower interest rate. Student loan consolidation is a process of combining more than one of your student loans into a larger one to achieve a much lower interest rate as well as a settled payment.
When you have obtained student loan consolidation services, you are now transferring all your loans to a single new lending institution. The new lender will deal with the payments, interest rates and other things associated with your original student loans. What you need to do now is paying off the new balances required by your new lending institution. Your new lender uses the funds to pay for all your other student loans.
Why Do We Need Student Loan Consolidation?
As a matter of fact, many students are now strapped with all kinds of loans. Student loans are really helpful for us by financing our education tuition, general living expenses and other types of expenditures. However, after the graduation, we will have to pay off the loans no matter what kinds of life we are living now. Student loan consolidation is a pretty good way to alleviate our burdens on the college loans.
Low Interest Rates & Monthly Payments
With a student loan consolidation, we are able to enjoy more bonuses on the loans. First of all, we would save a lot of money on the monthly payments. Our new lenders are trying to offer more convenience for us. They would like to maintain our loans to a much longer period. In this way e our monthly payment will decrease. The lenders also work hard on lowering our interest rates. Usually, the interest rate for a student consolidation loan is the weighted average of the interest rates on all the original loans.
Enjoy Less on Total Sum of Loans
Secondly, the student loan consolidation would reduce the total amount of our loan at the end of the term. This is one of the most attractive factors of student loan consolidation services. If you have three different kinds of loans in school, adding up a total amount of $100000, then when you turn to student loan consolidation companies for help, you will pay less than this number when you finally finish all the loans.
Are There Any Additional Fees Required for Student Loan Consolidation?
You must wonder that if there are some required fees for consolidating your student loans. We are very glad to find that the answer is absolutely NO! There is NO fee to be paid for student loan consolidation services. Under no circumstances will you need to pay costs for consolidating your student loans.
So, if someone or some companies ask you to pay some up front fee for student loan consolidation, it is most likely a loan scam. Please take care of such things to avoid any possible scam.
Some federal education loans such as Stafford loans and Plus loans may charge some fees. But the number is very small. Besides, the fees always come with the disbursement check and there is never any up front fee.
Tips to Consolidate Your Student Loans
Student loans help numerous students complete their higher education. However student loans may become a nightmare when you have to send payments to more than one lender each month. Thanks to loan consolidation, you can combine multiple loans into one single loan with one monthly payment.
Loan consolidation can bring borrowers various benefits, such as flexible repayment options and reduced monthly payments. Sometimes you may qualify for lower student loan consolidation rates than the original loans. With so many benefits, you must be curious to know how to consolidate student loans.
Here, we’ll give you some simple tips
• Check to see whether consolidation is right for you. Despite of the potential benefits, you still need to consider the overall cost of repaying the consolidation loan. Since you’ll be given up to 30 years to repay the loans, you may have to pay more in interest.
• Find out certain student loan consolidation rule. Discover the eligibility rules and make sure your student loans are eligible to consolidation.
• Choose a reputable student loan consolidation company. When comparing various student loan consolidation companies, you need to focus on several factors, such as the consolidation rates and loan repayment terms.
Colleges are now getting more expensive than ever. The increasing college costs and tuition fees now are making it a necessity for many students to apply for various student loans to pay off the high costs in college. However, the various student loans can also bring a lot of trouble for the debtors. Many college graduates now are unemployed or underemployed, and they are not able to pay back the huge student loans.