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Student Loan Consolidation - How to Lower Monthly Payments
Student Loan Consolidation
Is it really possible to lower your monthly payments for student loans by consolidating? There are options out there for students that have borrowed from more than one source for student loans. You have to pay them all back anyway, but why not save a bit of money while doing so? Its a great idea that saves you money in the long run and helps to get out of debt.
It is not uncommon for people to get more than one loan to pay for college, although ideally you should try to stay away from that. Rather than quitting school for lack of funds though, many opt to go the route of taking out another loan. The thing is, that you have to pay on multiple loans each month. So it makes a lot of sense to consolidate your loans so that you are paying one payment each month instead of several. Many people consolidate their federal student loans into one. One payment for a few loans is much more ideal.
Extending Payments Out Over Time
When you are paying off your student loan or loans, sometimes things can get difficult financially. If you are struggling to pay for them each month, another benefit to consolidating is that you can extend the amount of time you are paying on the loan. This benefits you for the time being by giving you lower payments each month. While trying to get established in life, and on your feet, this can be very helpful. I would recommend that if you do this, to try to still pay off as much as you can as soon as you can. Having your loans drawn out too much has you paying far too much for them in the long run. It just depends on your current situation, on whether or not cutting your payments into say a third of what they are, is a good choice for you. Only do it if necessary, however.
What types of Loans can be Consolidated
Some have consolidated Federal Direct Loans, Federal Perkins Loans, Federal Unsubsidized and Subsidized Stafford Loans. You can also consolidate Health Professions Loans and Federal Nursing Student Loans. Wherever your loans are from, consider asking what options are available to you, and especially in regards to consolidating with other of your student loans.
Your new consolidation loan will have the term determined by your total education debt. Your interest rate will likely be based on the weighted average of the loans being consolidated.
There are websites where you can find out more about whether or not student loan consolidation is right for you or not. One site lets you enter your student loans to see how much you can lower your monthly payments. They will let you have an idea of the cost as well.