Student Loans Consolidation Advice


If you are like a lot of recent college graduates you have come to the realization that the monthly student loan payments are a real drain on your budget. Your new entry level job just does not provide the income that allows you to keep up will all the loan payments. Like many recent graduates you probably have several student loans totaling more than $20,000. In fact some college graduates owe more than $80,000. In general these loans must be paid off in less than 10 years and even though the interest rate is relatively low the multiple payments really add up on the first of each month.The best option for most people who have multiple student loans is a student loan consolidation. The main benefits of educational loan consolidation are:Lower Monthly Payments: Most student loans must be repaid within 10 years and by consolidating your student loans using a Federal Consolidation Loan you can extend your payments out to 30 years. This will immediately lower your monthly payment by as much as 50 percent. This will also have an immediate impact on your quality of life at a time when you are just starting your career.Interest Rate Flexibility: In general most Federal Student Consolidation loans have several interest rate options. These include fixed rates, adjustable rates that have maximum rate caps and income sensitive rates. The latter is an interest rate that changes as your earning ability changes. Doing your homework on consolidation loan features can pay big dividends. Many times interest rates and features are negotiable but only if you take the time to ask your lender for a lower rate or longer payment terms. It never hurts to ask.One Convenient Payment: If you are writing more than one check for each loan at different times of the month then you are more likely to miss a payment or make a late payment which will hurt your credit rating. In addition you must do a better job of managing your payments. One payment also means you only have one lender or loan servicing company to communicate with. This really important when something goes wrong and you need to skip a payment or track a late payment. Simple is always better.So what loans are eligible for consolidation? Almost all federal student loans are eligible for consolidation. Additional eligibility requirements include:Loans to be consolidated must exceed $20,000All loans must be in good standing and not in defaultLoans to be consolidated may be in deferment or repaymentConsolidating your student loans is probably the best thing you can do as a newly graduated college student. Doing your homework can save you thousands of dollars, improve your credit score, and improving your quality of life.