Student Loan Debt Consolidation – Basic Things to Know

2007-03-08 10:33:40

( Financial )



Student loans are a great help for students who need the financial support for their education. The most common student loans are government or federal student loans and private student loans. A student can take out either one or both. Unfortunately, many students actually obtain more than one of each just to be able to go through with their studies.

Having multiple loans can easily lead to a huge financial strain when the amount you have to pay each month greatly exceeds your monthly income. When student loans have turned from help to burden, a student loan debt consolidation is a good option to consider.

A student loan debt consolidation simplifies your payments by putting all your various education loans into one loan. This leaves you with only one monthly payment to make to the loan consolidation lender, which will be easier to manage than having multiple bills.

In addition, the monthly payment on a federal student loan consolidation is usually lower with fixed interest rates. This can reduce your overall payments as much as fifty percent, depending on how long you opt to pay back the loan. You can extend payments on a student loan debt consolidation up to 30 years. However, it is important to consider the payment term carefully because the longer it takes you to pay the loan in full, the more your overall costs will be. A long-term student loan debt consolidation is suitable for those with low earning power.

Once you have consolidated your loan, you cannot obtain another loan consolidation in the future to secure a new lower rate. You may re-consolidate your loan if
1.) You have an eligible student loan that is not part of your initial consolidation
2.) A student loan was disbursed to you after the getting the loan consolidation

There are no fees required to consolidate your loan. The process typically takes 30 to 45 days once the lender receives your signed application. For faster application, you can try any online student debt consolidation service. In choosing a lender, always check the company’s credibility and reputation.


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