why should you consolidate school loans?

2007-03-08 10:33:40

( Financial )



When you decide to consolidate school loans, you take out a consolidation loan which pays off all your existing student loans. You end up having to deal with only one monthly payment plan at a fixed rate. Consolidating is helpful if you have taken out different loans to fund every school term and are getting tired of managing several bills coming in monthly with different due dates.

When you consolidate school loans, you get to take advantage of the following benefits:

1. You get to SAVE MONEY by lowering your monthly payments. When you consolidate school loans, you will only need to pay off one loan. This can significantly decrease the amount you pay per month.

2. Consolidating means FEWER Bills and LESS paperwork. You will no longer have to contend with several bills coming in each month. If managing one loan is difficult, imagine juggling several loans with different payment deadlines. By consolidating, you prevent the possibility of having to pay huge penalties for forgetting to pay for one of the loans.

3. You benefit from having a LOW and FIXED interest rate. One loan means one fixed rate. All your other loans may offer low interest rates but paying off several interests, no matter how low, translates into quite a substantial sum.

4. Compared with other loans, consolidation loans offer more FLEXIBLE payment terms. The best loan consolidation programs can customize your payment plan according to your financial status.

5. Another benefit is saving as much as 0.25% off your student loan consolidation rates if you make your payment electronically. Furthermore, choosing to use direct debit from your bank will help you avoid missed payment penalties.

However, you have to do your research before you can choose the best student loan consolidation program available. Consolidation loan programs vary and it is important that you understand the terms before you sign any contract.

It is understandable if you become a bit hesitant about consolidating school loans. After all, one possible outcome is that your debt can increase. This happens when you fail to avail of the best student loan consolidation rates and end up having to extend the term of your loan.

Nevertheless, it is still a wise decision to consolidate school loans if you are looking for an effective solution to the problem of keeping up with the payments of your monthly student loans.


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