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Features of Student Loan Consolidation
In todays scenario, where the whole world is reeling under a huge economic crisis, paying off multiple student loans can prove to be really difficult. Apart from the fact that you need to remember the monthly repayment dates for all your student loans, keeping a track of the varying interest rates and paying off huge sums of money each month can surely disturb your monthly budget. Therefore, if you are looking for an option that is far simpler and can assist you in lowering your monthly repayments, you can go ahead and consolidate student loans. Yes, by consolidating your student loans you end up making life much easier for you. Here are some key features of student loan consolidation:
To begin with, instead of paying simultaneous monthly payments, each with a different date, you simply need to make a single monthly payment. After you consolidate student loans, you are presented with a fixed interest rate that is capped at 8.25 percent, which is much lower than the interest rate of your student loans. The monthly payment, if you consolidate student loans, becomes pretty less than the total of your individual student loan monthly payments. The repayment period can increase, if you consolidate student loans. Therefore, instead of paying off all your loans within 10 years, you can consolidate them and extend the loan repayment period to 12, 15, 20, and even 30 years. You can pay off your single consolidated loan electronically. Most lending companies even offer you 0.25 percent off on the interest rate, if you pay your monthly installments electronically. You do not need to pay any processing fees to consolidate student loans. The whole process is free of cost, which is yet another advantage for you. Students as well as parents who borrowed the money can consolidate student loans. However, students and their parents cannot combine their individual loans for consolidation. This is because only loans from a single borrower can be consolidated. You have the option to consolidate student loans with any lender. This provides with the facility to look for lenders that offer the lowest interest rates and other benefits.
With such great features, it is not surprising that more and more students opt to consolidate student loans. This makes life relatively easier for them and allows them to concentrate on their job and career. By getting to consolidate student loans, you know how much exactly you need to shell out each month. In addition, the single monthly payment, which can be paid electronically or through direct debit from your bank, relieves you from remembering the monthly loan repayment date. A lower monthly repayment option is one feature that most students look out for while repaying their student loan. This is because most fresh graduates need to be contended with a low monthly salary that can increase only through performance and experience. In such a situation lower monthly repayments are really welcome to such graduates. This and the above mentioned features, is exactly the reason why student loan consolidation is gaining such prominence.
Student Loan Consolidation Program – Are The Benefits Worth Your Effort? (Page 1 of 2)
There are a lot of benefits one can get when he or she consolidates his or her student loans. But just as there are benefits, there are also some disadvantages. It is best therefore for you to read and know all you can on consolidating your student loans before making that all important decision and therefore sealing your financial fate.
But loans being as they are – annoying and relevant at the same time, the kind you cannot live with but at the same time cannot live without – you just can’t help but avoid thinking of them until that period where you have no choice but to pay up. But do not fear, the federal government is here – believe it or not – to help ease your payment of your student loans.
With the help of Congress, all your student loans could now be combined into one. Not only that, doing so results in automatically lowering the payment you have to pay every month. Plus you are provided with very flexible means of payment. Not only that, there are also features where you could – if you wish – extend the period you want to pay your student loans.
Still not convinced or are you still confused? Okay, to make it clear, the following are the benefits one could acquire when he or she gets to consolidate any or all their student loans.
You get to have the advantage of making payments that are lower than the ones you regularly pay every month.
Not only will you get to have monthly payments that are lower, you also will get to pay one and only one loan per month. This is in lieu of the several loans you may have if you do not consolidate your loans.
Besides only one payment made each month and a low one at that, the interest rate attached to the loan is a fixed one! It should and must not get to be over 8.25% at any period during the whole duration of the payment for your student loan. This is enough to get anyone going especially now that interest rates available nationally are at their lowest in over forty years.
And here is the best part, the process one goes through when applying for a consolidation of student loans is very simple. Believe it or not, the application does not involve any forms of credit check. There is also no fee involved for processing the application for consolidating student loans.
When you consolidate, you could also avail of a plan for payment that is flexible. This means you will basically be able to create a plan of repayment that you think suits you the best, financially of course. This is a great opportunity for you to assess your current financial needs as well as your financial needs in the future.
Also, if you decide to pay your loan via electronic means, you will be able to decrease your interest rate by .25%. Doing electronic payment also keeps you updated in your payments and decreases your chance of ever forgetting to pay.
Another thing, when you consolidate your student loans, you will have an option to, if ever you decide, to prepay the loan you have at any given time with no penalty whatsoever.