Reasons Not to Consolidate Your Student Loans

When you consolidate your student loans you get significantly lower monthly payment fees and your monthly interest rates are also lowered. When these are a great help in managing your monthly budget, there are also disadvantages to consolidating your debts.What are the cons of college loan debts consolidation?You will end up paying for more than the overall cost of your loans. Why is this? When you consolidate your student loans your repayment term is extended so that your monthly payment and interest rate are lowered. But if you sum it up, you will actually be spending more instead of saving, and if your repayment term extends up to 30 years, imagine how much you will be losing.There are also some helpful borrower’s benefits that you might lose if you consolidate. These benefits include interest rate discounts and rebates. Federal loans can allow you to apply for payment deferment in case you decide to go back to school or loan forbearance if you encounter economic hardships. These benefits could be lost if you consolidate especially to a private lender.Since debt consolidation interest rate is the weighted average of your various loan rates, there is a possibility you’ll end up paying for a higher rate than if you pay your loans separately. This happens if you consolidate a high rate loan with other low rate loans.Consolidate your student loans only if you don’t have any other options. If you have mostly federal loans, check with your lender of college if you qualify for loan forgiveness. This is possible if you can work as a teacher, doctor or lawyer in low income areas in the U.S. If you belong to other professions, then perhaps you can do volunteer work for the Peace Corps or Americorps to lessen your college debts.

Student Loans Consolidation – Three Benefits That Make Your Life Simpler

If you are a student or a graduate, it’s quite likely you accumulated a bit of student debt while paying for college. This almost goes hand in glove with American higher education these days. If this is you, you likely have multiple student loans, each with a different amount due, a different interest rate, and a different payment schedule. For some people, this is manageable. For others, it’s a nightmare.Juggling the amounts, the balances due, and the payment schedule can wreak havoc on your life. This is especially true if your paycheck doesn’t go as far as you’d hoped when you were in college. If you want to simplify your life, you should consider student loans consolidation.There are three main benefits that make it worth your while.PredictabilityIf you consolidate your student loans, you no longer have multiple loans to keep track of. They are all rolled into one. With one loan, you only owe money on one balance, and you only have to make one payment each month. Compared to the chaos of managing multiple loans, this is an easy pattern to fall into.CertaintyA benefit of having only one loan to pay back is that you only need to worry about one interest rate. You don’t have to spend time calculating how much money each loan is costing you in interest, and prioritizing your loans to see which one you should make the payment on this month. Having one interest rate gives you certainty.ConsistencyFinally, if you consolidate your student loans, you don’t have to keep track of all the due dates on the calendar. You no longer have to write three or four checks on different days every month. You simply write one check. You no longer have to track how much you still owe on three or four loans, either. Writing one check each month simplifies your life. You can do this consistently, without any problem.Student loans consolidation can make your life simpler in many ways. And, simpler means better. Look into consolidating your student loans and see if you can benefit, too.