By Juhani Tontti
The main reason, why so many graduates want to Consolidate Student Loans is the fact, that they need more disposable money every month, i.e. the lack of cash. The graduates have a lot of expenses to pay, so many want to postpone the payments as long as possible.
1. When You Consolidate Student Loans The Loan Management Will Be easy.
It is a real pain to try to manage the many student loans from different lenders and to remember how much and when you have to pay. But when you will consolidate student loans all your old loans will be paid away with the new loan and you will get only one loan.
The interest rate will be the weighted average of the old loans, if you do not succeed to get lower rates. If you manage to get both the longer payment time and the lower interest rate, that will significantly reduce the monthly payments.
2. The Improved Credit Score.
When the original student debts were negotiated you had most probably lower credit scores, because you had no income, just debts. But after you have graduated and maybe got work during the grace period, that will improve your credit score and thus to lower the interest rates. If the economic situation in general has lowered the rates, that will be a real jackpot to you.
3. The Longer You Pay, The More You Pay.
The lower monthly payments are nice, but they have their price. The longer you will pay, the more interests you will pay. This means that you have to find out a balance between the pros and cons. Many lenders will allow the quicker payments, than what was agreed originally.
4. Ask Several Quotes.
When you will consolidate student debts you better ask several quotes, because the lenders have different terms and their own financial situations are different. You can also ask, whether the concentration of the family loans would bring any reductions to the interest rates.
5. Keep The Private And Federal Loans Separately.
The federal loans have benefits, which the private loans do not have and this is the simple reason, why you cannot consolidate these two or you will lose the extra benefits, which would be stupid. If parents have taken loans for the children, they have to consolidate them as a separate group. You can consolidate one loan only once, but if you continue studying, you can take more loans and then consolidate all loans into one loan.
1. When You Consolidate Student Loans The Loan Management Will Be easy.
It is a real pain to try to manage the many student loans from different lenders and to remember how much and when you have to pay. But when you will consolidate student loans all your old loans will be paid away with the new loan and you will get only one loan.
The interest rate will be the weighted average of the old loans, if you do not succeed to get lower rates. If you manage to get both the longer payment time and the lower interest rate, that will significantly reduce the monthly payments.
2. The Improved Credit Score.
When the original student debts were negotiated you had most probably lower credit scores, because you had no income, just debts. But after you have graduated and maybe got work during the grace period, that will improve your credit score and thus to lower the interest rates. If the economic situation in general has lowered the rates, that will be a real jackpot to you.
3. The Longer You Pay, The More You Pay.
The lower monthly payments are nice, but they have their price. The longer you will pay, the more interests you will pay. This means that you have to find out a balance between the pros and cons. Many lenders will allow the quicker payments, than what was agreed originally.
4. Ask Several Quotes.
When you will consolidate student debts you better ask several quotes, because the lenders have different terms and their own financial situations are different. You can also ask, whether the concentration of the family loans would bring any reductions to the interest rates.
5. Keep The Private And Federal Loans Separately.
The federal loans have benefits, which the private loans do not have and this is the simple reason, why you cannot consolidate these two or you will lose the extra benefits, which would be stupid. If parents have taken loans for the children, they have to consolidate them as a separate group. You can consolidate one loan only once, but if you continue studying, you can take more loans and then consolidate all loans into one loan.
Juhani Tontti, B.Sc., Marketing. If you need more disposable cash, you can consolidate student loans, because the student loan consolidation can reduce the monthly payments. Visit: consolidated student loans
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