Student loan consolidation refers to a process where many loans are consolidated in to a single loan, thereby facilitating the student to pay only one payment monthly towards all his debts and loans.
In this case all the loans are written off and a new student loan is created. You have to pay this loan towards each month.
Financial experts feel that consolidation of student loan is a great and easiest way to reduce debt. You must have heard and even seen with your naked eyes that many students have to live without money coming from their parents.
This makes it really hard for them to survive as they literally require about thousands of dollars to pay each year on their college tuition fees. This forces these students to look for educational loans to keep up with their expenses.
Now, most of the time, one loan is not adequate for a student to acquire the money he or she requires in order to complete college education. Hence, they end up taking more than one loan. Now, these days, it is not an easy task to finish off an education loan. When it comes to paying off more than one loan, one definitely requires expert assistance.
There are several benefits you can enjoy when considering student loans consolidation. Here are some of the benefits you must expect:
A) Lower monthly payments
Consolidating all your students or education loan in to one will do a lot of benefit for you. The best part about this process is that it allows you to pay off only one loan each month instead of several loans. This saves you from a lot of headaches, confusion and writing many checks together. This also results in reduced amount of payment you require to pay as installment towards each month.
B) Low, fixed interest rate
When consolidating a student loan, the student is able to benefit from low and fixed interest rates. The law has stated that the consolidation rates cannot exceed more than 8.25%. This way you tend to save a lot of money when paying students loan.
C) No credit card check or processing fees
You don’t require to go through a process of credit card check or processing feed when consolidating a student loan. The best part is that the payment plans and terms are flexible and can be easily customized according to one’s financial situation.
D) Electronic payments
Once you have consolidated your student’s loan, you can easily make your monthly payment electronically. Most lenders usually knock off about 0.25% from your loan rates, if you make payment electronically. Also, when using direct debit from your bank account, you don’t face problems due to forgetting to make a payment.
E) Relieve stress
Student loans consolidation can work towards relieving a lot of stress. This will further help the students to focus on their education, instead of debt. Now, you don’t need to spend sleepless nights just thinking about how to pay off your debts.
With so many benefits, you should not give another thought about consolidating your student loans.