Benefits of Student Loan Consolidation
“What are the benefits of student loan consolidation?” is a frequent question for borrowers faced with the reality of student debt that can easily add up to hundreds of dollars each month, and for many graduates that’s a burden that prevents them from saving for the future, buying a home, and traveling.
With the average student leaving college over $35,000 in debt, graduates everywhere are feeling overwhelmed by their student loan balances – even if they have decent jobs and a steady income. Those unable to get ahead in life because of debt may want to consider the benefits of student loan consolidation in easing the strain and gaining some financial freedom.
The Benefits of Student Loan Consolidation
All graduates ask “Should I consolidate my student loans?” at some point, simply because of the pretty incredible benefits of student loan consolidation. For starters, qualifying for a lower interest rate and a more manageable monthly payment. This alone can save hundreds of dollars a month, freeing up cash that can be used to save for a down payment, buy a new car, or travel the world.
Borrowers can also release a cosigner and simplify into one easy payment, rather than continuing to juggle various loans each month. And finally, consolidating student loans provides the opportunity to change a variable interest rate to a low fixed-rate loan, so there are no surprises about by the amount owed. Take a look at the student loan refinancing calculator to get an idea of the benefits of student loan consolidation.
The Disadvantages of Student Loan Consolidation
As with everything in life, there are some disadvantages to consolidating. For example, federal student loans come with benefits, such as forgiveness options, that can be lost when consolidating through a private lender. However, borrowers have to meet very specific criteria to take advantage of these benefits, and may not qualify. It’s a smart idea to find out exactly what the benefits of student loan consolidation are before you answer the question of “Should I consolidate my student loans?”,
Consolidating student loans also changes loan terms. A lower interest rate and more manageable monthly payments could have a longer loan term. Determining the benefits of student loan consolidation needs to consider the advantages of more financial flexibility and the disadvantage of a longer term.
Should I Consolidate My Student Loans?
When asking “Should I consolidate my student loans?”, the bottom line is that borrowers don’t have to struggle under the weight of bloated payments. If the amount owed each month is simply too large in comparison to income, it’s a smart idea to look into the benefits of student loan consolidation. This is especially true if debt holders won’t be receiving a substantial raise in the near future and expect to struggle with debt for a while.
How to Get Started
Once a borrower has decided to consolidate their loans, it’s a fairly straightforward process. For exclusively federal loans, on can consolidate with the government, through the Federal Direct Loan Program. For exclusively private loans, one should refinance with a private bank or credit union. And finally, for both private and federal loans, borrowers will want to receive the benefits of student loan consolidation through a private lender. To get started, click here to compare rates and find the perfect loan.