Private student loan consolidation aims to ease your financial burden by combining all your private loans under one loan program. Making monthly payments for different loans could be quite frustrating, particularly when you have other bills to pay. At times you may not even have the resources to pay for all the loans that pile up one after the other. Private student loan consolidation plans bring all your loans together and what you are left with is a significantly reduced amount of monthly payments at lower interest rates (in most cases).One loan, one paymentWhen you consolidate all your private loans into one loan program, it becomes easier for you to make a single loan payment every month. Not only are your monthly payments significantly reduced, but you also benefit from improving your credit score over time. Maintaining a good credit score secures your financial future and helps you to obtain other loans in the future (car loans, mortgages, etc-).Make your finances more manageablePrivate student loan consolidation is a great way to simplify your finances. For example, if you have 10 college loans, you will need to keep track of 10 different monthly payments; adding to this are 10 different payment due dates. This kind of financial situation can be quite overwhelming for a student who is trying to make ends meet. A private student loan consolidation program makes sure that all your existing loans are brought together under one loan program, and all you need to do is make single payments every month, instead of multiple payments that could leave you confused and frustrated.Extending the loan repayment termsOne great feature of private student loan consolidation is that you can extend your loan repayment period for up to 30 years. This gives you the opportunity to spread out your monthly payments over a long period of time so that you are able to pay a lesser amount every month. The downside to this is that you might actually end up paying more considering that your loan period is extended. However, different private loan companies have different policies, and it is always better to carefully go through the terms and conditions before going through with any type of student loan refinancing program.When you are making multiple monthly payments to payoff your student debt, you may find it nearly impossible to save money or make all of your payments each month. As a student or recent grad, you need to look out for different ways to save money and private student loan consolidation program is definitely a smart way for most people to reduce monthly payments.
Many people who badly need money make the mistake of doing business with companies that steal money from them rather than lend it. These scams are usually directed at people who already have bad credit. More people are in financial trouble than ever before, and many criminals are taking advantage of this situation. Those who are filing for credit counseling or bankruptcy are at a high risk for these types of scams. Here I will show you common scams and what you can do to avoid them.Money Up Front ScamsIf you are in a situation where you need to file bankruptcy or seek credit counseling, your life is likely already hard enough as it is. The last thing you want is some con artist taking more of your money. Unfortunately, a huge market exists for these types of scams. The most common trick used by debt consolidation services is to make an offer to loan a client money despite their credit history. They will ask that the client pays three months in advance before they are able to loan them money. The company then takes the payments and refuses to loan the client money, stealing from them.Many of the customers never hear from the company again. Many of these companies make themselves appear legitimate by purchasing advertising space in the local phone book, a place that most people trust to find their information. As more people suffer from debt, these scams will continue to increase.You should avoid any lender which asks you to pay money up front for the loan. This is generally the first sign that a service is likely a scam. There is no reason you should have to pay a fee up front. Any lenders which ask you to pay before you receive the money are likely con artists. You should only have to pay money back after you’ve been given money, not before. Many of these services will also try to get you to send out a wire transfer.Wire transfer services like Western Union are not secure, and there is no recourse available if something goes wrong. The transactions can’t be traced, and you should avoid any services which ask you to wire money to them. If you feel the need to borrow money, you should use a service which is recommended by a friend or member of your family. This is much better than calling a random service which you’ve never heard of.A Word On The Side Of CautionIt is important to be cautious when looking for loans, especially those which are unsecured. The first thing you should realize is that there is no such thing as a loan which is guaranteed. You should be wary of lenders who promise that you will be approved without bothering to check your credit history.It is an unfortunate fact of life that many people make a career out of stealing money from others. Much of this fraud is perpetrated by groups which are highly organized. Getting scammed in a situation where you are already on the verge of bankruptcy can be enough to push anyone over the edge. People tend to make the most mistakes when they are desperate. It is important to analyze the situation and study the lender carefully. Anytime you are asked to pay money up front this typically means that it is a fraud, and will not end well if you fall for it.The most important thing you can do before choosing a lender is to do research. Find out how long a company has been in existence. If they don’t have an established history, this likely means they are a fly by night operation, and you will want to avoid it.