May 14 2009
5 Benefits of Student loan consolidation
Have you become discusted with paying interest on your monthly student loans and imagine that there is no end in sight? Do you have the idea that cash-flow troubles may prevent you from paying off your student loans on time? If this is your situation,there is a solution to this problem. The resolutin is called student loan consolidation.
Student Loan Consolidation, What Is This?
Student loan consolidation plainly means consolidating all your student loans into an individual loan with a monthly payment plan. Effectively, all your former student loans are paid off and a new student loan is created which you have to pay off monthly.
Student Loan Consolidation, The Benefits
Here are some of the benefits of student loan consolidation
1. Lower monthly payments
As a consequence of placing all your student loans into one loan, you will now have only one loan monthly paymet. This is instead of your current multiple payments. Therefore, your monthly payment is lower
2. Make payments on only one loan monthly as opposed to several student loans monthly
It is a lot easier to manage only one student loan instead of several student loans with different payment deadlines. Besides, some of the times with many student loans, you may end up forgetting to pay one of your loans.
3. Lower, fixed rate of interest
By consolidating your loans, you can take advantage of lower, fixed interest rates. Presently, by law, student loan consolidation rates cannot exceed 8.25%. Furthermore, national interest rates are currently at a 40-year low. And therefore this is a good time to get one.
4. No credit check or processing fees
A credit check is not required during the application of a student loan consolidation. The payment plans and conditions are usually quite negotiable in that they can be customized to fit your financial situation.
5. Payments can be mad monthly electronically
Altho it is not necessary to send payment electronically, most lenders will knock 0.25% off your loan rates if you make payment electronically. Also, if you use a direct debit from your bank account you can schedule it so that you will not miss making your payments.
Sometimes it can get quite confusing as to what the prerequisites are to qualify for a student loan consolidation. The official statement from the government is that any student that is still within their grace period or who are still studying in school may qualify for government student loan consolidation
The rates for a government student loan consolidation nowadays are quite competitive compared to private sector, therefore I would advocate going for a government student loan consolidation. With so many benefits of getting a student loan consolidation, it is a very obvious way to save money in the long run.