Why You Should Consider Student Debt Consolidation Loans

Why You Should Consider Student Debt Consolidation Loans

by Adam Hefner

You're living in a small apartment, driving a used car, and working harder than you ever imagined possible. Despite all of your sacrifices, you're still struggling to meet your monthly payments for all of those student loans. The solution to regaining control is student debt consolidation loans.

By taking out a new loan, with an unbelievably low interest rate, you can pay off all of your existing student loans. This leaves you with a single monthly payment that's formed to fit your budget.

If you have federal student loans, you can qualify for a federal based consolidation loan. These are supplied by the government and issued by private lenders. It's free to set up, there's no credit check, and you don't need a co-signer. A weighted average of your current rates determines the new interest rate you'll be paying. You can save up to 60% each much by doing this.

If you don't qualify for the federal consolidation loan, you can still use a private consolidation. With this option, you'll need a credit check and there will be associated fees and charges. However, you can use a co-signer if you don't qualify on your own. There's often a low fixed rate the first year, followed by a competitive variable rate. This has the potential to save you 45% in the first year.

Basic qualifications are clear-cut. Your existing student loans must not have been previously consolidated. Also, you cannot be enrolled in school more than half time. Finally, the loans must be in either grace or repayment periods.

You even have the freedom to set up your payment time frame. To avoid paying more from interest, you can pick a shorter payment plan. However, if you've been having a hard time making ends meet, and have a lot of debt, a longer plan would be best. You can extend your term up to 30 years, making monthly payments very affordable.

By consolidating your student loans, you'll have more money available. You can focus on paying off other debts you may have. You can even start saving money and investing. Once you realize how much money you were spending each month on multiple student loan payments, you'll wish you had consolidated sooner.

Regardless of your financial situation or your goals and dreams, student debt consolidation loans are a great tool. You shouldn't have to work hard and still end up worrying about making multiple payments. Do yourself a favor and consolidate your student loans.