If you are one of those persons who had to ask for any existent kind of loan to afford college expenses, and if you are near your graduation date, you may have already started to think about how close repayment starting are and how are you going to do to live within a monthly budget if you have to pay the many bills that will come. Student loan consolidation may be the best option to reduce your debt and also your bills. Here you have some answer to all those questions you may have.
What is a Student Loan Consolidation?
Student Loan Consolidation consist in the centralization of all your education loans into only one loan. The idea of doing this, is to try to save money by reducing the interests and have less bills accumulating into your mail every month.
What Kinds Of Loans Can Be Consolidated?
All Federal student loans are eligible to be consolidated, even PLUS loans. And most of private loans can also be consolidated, with some restrictions that you will have to consult with your chosen lender.
When Should I Consolidate My Education Loans?
To be eligible for a student loan consolidation, you have to be already graduated; your loans must be either still in their grace period or already started repayment. Your parents, in the other hand, can consolidate their loans at any time they consider best.
The best time for you to apply for a student consolidation loan, if you meet the mentioned requirements, is whenever you feel it is necessary. Anyway, if you are already near canceling any of your loans, you should consider first the benefits offered to you by your actual lender, and if it will be better for you keep that loan out of the consolidation and fulfill its payments by separated.
What Are Consolidation Benefits?
These kinds of loans may help you to save thousands of dollars on interests. As your loans become only one loan, interest rates of all your actual loans are combined into only one interest rate, this will beneficial for your pocket in the long term.
Regularly offered terms of student loan consolidation are 10 years. You may choose an extended term, or a shorter one if you think you will be able to do the monthly payments. Make sure you have asked all those questions that you could have before choosing a certain lender and a term length. The interest rate will be in your favor only if you chose a standard or reduced term plan. Longer terms reduce your monthly payment but their interests’ rates are higher.
Anyway, the good news is that you can change your student loan consolidation’s terms once a year. You may want to start with a regular 10 year plan and then you will see, if you can get along with monthly payments you may want to keep or reduce your plan’s length. If the amount to be paid month by month gets to high, you can choose then, to switch into a longer repayment plan.
Where Can I Apply For A Consolidation Loan?
You can consolidate your education loans with any lender. You may choose to consolidate with any of your actual lenders, or find a new one. Interest rates offered by different lenders are the same, they can make the difference by offering you rewards programs or benefits like future interests reduction for on time payment. The best thing to do is to search and compare many lenders, including your actual, before taking a final decision.