How to Cut Costs by Consolidating Your Student Loans

Going to college can put some people back financially, and before you know it, it is time to pay back those student loans. Some people have many of them, often one per year sometimes and more. It makes sense to consolidate all of these payments into one that you pay just once a month and possibly pay out a little bit less on overall. Student loan consolidation turns out to be a great way to cut costs. I am going to cover a few often asked questions regarding student loans.

How does student loan consolidation work exactly?

Many loans are consolidated into one easy to pay loan. This is done by getting your original debts paid off and rolling all those balances into one. You then get a larger loan with a fixed interest rate. This makes things easier to deal with very often, and if things are extra tight financially, you can get them spread out over a longer period of time.

What are the benefits of consolidating my student loans?

As stated previously, you get to pay one payment to a single lender instead of many payments to many lenders. Its possible to lower payments significantly by stretching out the payment plan. There are no fees or credit checks, and usually no prepayment penalties. I would double check this as you want to know that you can pay more on your loan if you are able, without being penalized. There also is a fixed interest rate, and it is law. There is a lifetime cap of 8.25 percent, and must be adhered to.

Where can I get a consolidated Student Loan?

Whether you are getting a FFEL consolidation loan, or a direct loan consolidation, you will want to contact a bank, credit union, or lender of your choice. Call on the phone or search them out on the Internet. There is a Direct Loan Origination Center Consolidation Department that you can call as well. I will post some of these links below the hub.

Keep in mind when you speak to someone about loan consolidation and the options involved, that private loans are not eligible for student loan consolidation. Consolidations like these aren't just for students either but for parents who have borrowed money on behalf of their children's loans.