What Is A Student Consolidation Loan?


With higher education being so expensive these days, not many students find it easily affordable to join the college of their dreams. The tuition fees, books, accommodation all cost quite a bit and students take various loans to help finance their higher education. But they are faced with a daunting task of repayment. This is where a student consolidation loan comes in handy.The terms of this loan means paying off the loans at once by consolidating various smaller loans and replacing various repayment schemes with just one single monthly repayment. But taking a loan is a very serious decision which a student should take only after weighing all the pros and cons.A student consolidation loan is a popular manner in which students reduce and pay off their loans. A student loan has several advantages and disadvantages.Advantages: The interest rate is lower than the rates of interest of all the loans combined. As the student has to pay off only one loan it is easy for him or her to remember just one due date. The time frame to pay off a student consolidation loan is quite long, from 10 years to 30 years. So the amount to be paid off monthly is not so large. It is a wonderful way to clear the debt burden before one starts his or her career. It has helped many students to pursue their dreams and make it big in later life. Disadvantages: As the repayment period is long, the student ends up paying more money. At times the interest rate of the student consolidation loan works out to be more than the individual interest rates of smaller loans. Not all students are eligible for student consolidation loans. If the tenure left to repay individual loans is not much, then consolidating the loan does not make sense.