Student Loan Consolidations – Find Out If You Should Get One

2007-03-08 10:33:40

( Financial )



Student loan consolidations can be the best solution to relieving debt burden especially for students who have taken out several student loans to pay for their education. You can consolidate your loans whether you are still enrolled or you already graduated from school.

Like most debt consolidation loans, student loan consolidations have a fixed interest rate. By consolidating your student loans, you can secure a low interest rate, which will remain as is throughout the duration of your loan. Consolidating your loans can help can you save as much as 50 percent. You will also have only one monthly payment to make, which is usually lower than your current payments.

Another feature of student loan consolidations is longer repayment terms. Generally, you can stretch your payments up to 30 years, which will lower the amount you will pay each month. However, the downside to this is it increases the overall amount of your payments.

If you are applying for a federal student loan consolidation, check the list of eligible loans that you can consolidate. You may not consolidate a federal student loan with a private student loan, which are loans that you took out from banks and other financial institutions.

Student loan consolidations are not suitable if you are about to complete payments on your student loans or if the interest rate on the consolidated loan is higher than the current rate that you are paying. It would also be a good idea to calculate the total amount of your unconsolidated loans and compare it with the total amount you will have to pay when you get a loan consolidation. You can use free online loan calculators for quick and easy computations.

If after making your calculations and assessing your needs, you have decided that a student loan consolidation is right for you, you would need to provide information about your current loans including loan balances, interest rates, contact information of the companies that handle your current loans, and two personal references.

Before making a final decision on what student loan program to use for your loan consolidation, do some research to make sure you are being offered the best rate and always select a loan based on your needs.


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