There are different types of student loan consolidation, the main being private and federal loans. Consolidation process for both varies and the common form is private student loan consolidation. Depending on your situation, student loan consolidation can offer you some benefits. The first and foremost is that juggling several loans could be challenging to many people and when you consolidate into one loan, it becomes easier to monitor the loan and repay it on time. There is a high chance that you will get a lower interest rate when you consolidate loans because you will negotiate with your lender on the best loan rate.
Features of Student Loan Consolidation
There are some main points that you should note when you are considering student loan consolidation. These include
- The main reason for consolidating the loan is to stay organized. Making one payment is easier than monitoring many small loans that you may end up forgetting or missing payments therefore with a single loan you can easily know your budget and how to repay on time.
- Consolidating loans with a private lender gives you the chance of getting lower interest and potentially save on costs. You will need a lender with a good reputation and where you can negotiate on the pricing of the loan and get a good deal. A variable loan rate may apply in this case and it could be lower depending on the prevailing conditions. In most cases, private loan consolidation does not incorporate fixed rates, therefore giving the students a wiggle room.
- You will be in a position to recover financially and make better financial judgment, moving you from the cycle of debt.
According to a recent survey, there is rising college and student debts and this could be attributed to credit crunch, among other factors that causes the rates to rise sharply. Although the figures reflect the current economic status, you can overcome the situation if you have a solid plan and a method on how to get out debt. Student loan consolidation is an avenue where you can organize your finances and make a financial decision that will not affect you in the future. Once you have cleared all your previous loans, you can focus on one loan and know the best way to repay it. Student loan consolidation is the best way to help you overcome challenges that are associated with many small loans with high interest rates.
How to Consolidate Student Loans
Student loan consolidation allows the borrower to roll many loans into one big loan. Once this big loan is given by your lender, you can repay all the existing loans and have a single loan to check out. You should contact your lender and understand the terms and conditions that you are being given the loan as well as the repayment plan. We will connect you to many lenders in our network who will fund your loan. It is essential to note that each lender has his or her own interest rate and depending on your loan, you should be in a position to choose a loan type.
- If you do not have a very good credit score, you should not worry because we are here to offer financial solutions to many people who face challenging situations. You can qualify for loans as long as you have the ability to repay the loan within the stipulated time. The interest rate could be fixed or variable therefore, it is important when looking for a lender you ask what type of interest rate you are dealing with.
Benefits of Loan Consolidation
Convenience is the main advantage of student loan consolidation. Based on the number of loans that you are trying to juggle, keeping track of numerous bills is quite a challenge. If you are a recently graduated student, you will be in a good position to know how the financial world works and manage your bills as well as finances.
- There is a possibility that you will get a repayment plan that will suit your financial situation. Therefore, you will not strain during the repayment process. Different lenders offer different loan options and interest rates.
- The interest rate of the consolidated loan will be lowered considerably.
Do student loans save you money?
The answer to the question varies and it is based on the interest rates that your lender charges you and the fees associated with the loan. We link you to lenders in our network and they will help you make the best financial decision. You will be provided with all materials you need for understanding the loan. You can contact us via email or telephone number to get a glimpse of what is expected.
- Your lender will negotiate for a better pricing and help you make a better financial choice by incorporating all your loans into one. If you are thinking of consolidating your student loans, you should understand all aspects of loan consolidation before you make the decision to consolidate them.
- Once you have submitted a fully filed loan request form, we will forward the application to lenders in our network and you will find a suitable lender who will finance your loan.
- Your lender will contact you as soon as the loan request has been evaluated and a decision has been made on the amount and interest rate that you are supposed to pay.
- Even with a less than stellar credit history, we strive to connect borrowers to credit facilities that they cannot access in conventional lending situations where having credit scores is paramount.
Which is the best interest rate – fixed or variable?
If you are considering student loan consolidation, you should look at the interest rates being given by your lender. You will know the amount of loan that you are supposed to repay as well as interest. Federal student loans are fixed rates. However, for private student loans, they are mostly variable. You should consider the following.
Fixed rate consolidation loans
- They have a higher interest rate from the start. The lender knows that they will not capitalize on interest increases so you are given a universal rate throughout the enure of the loan.
- It is ideal for budgeting because you will know the amount of money that you are supposed to repay each month.
- It could be the right choice if you value the sense of security that comes with knowing your payments earlier.
Variable rate consolidation loans
The rates are variable based on the prevailing market conditions. It may fluctuate over time. However, if there is a projected good economic growth, then you may get a good deal that will help you lower the monthly cost of repaying the loan.
- It could be a good choice if you are willing to take the risk of long-term security to capitalize on the initial low rate.
In summary, consolidating student loans will vary from one lender to another and you should take time to analyze the situation before you make any decision.