Student Loan Consolidation Advantages – Staying Educated and Informed
In the United States of America, most consumers are drowning in an ocean of credit card debt and they are resorting to the debt consolidation options that can help you get out of debt. Just like credit card debt consolidation, you can also get your student loans consolidated and make sure that you repay them with ease. If you’ve taken out too many federal educational loans and now you can’t make the timely repayments on the loans, you need not worry.
The US Department of Education also gives out federal debt consolidation loans in order to help the financially needy students in consolidating their debt burden. Have a look at the various benefits of such a loan.
- You have to make a single monthly payment: You have to make a single monthly payment to the US Department of Education from whom you’re taking out the loan. Therefore, no longer do you have to divide your checks among 6-7 loan lending companies. You just pay to the aforementioned institution and all your payments will be distributed among the various lenders, thereby making you debt free.
- You will get various repayment options: You may get flexible repayment options if you combine all your student loans with this master loan. The most common repayment terms are Income Contingent Repayment Plan and the Income Based Repayment Plan. You can even change from one repayment term to another so that you do not face any kind of difficulties during worse financial state.
- Lower interest rates: The interest rates on the loan will be much lower than the combined rates on the federal educational loans. Most students are unable to repay their loans because of the high interest rates and if you can reap the benefits of low rates, what can be better for you? The monthly payments on the loans will be reduced if you combine all the payments into this single loan.
- Boosts your credit score: It is very important for a student borrower to keep track on his credit score as this will be checked by most employers before hiring you. If you can get a debt consolidation loan, you can get the multiple benefits and become current on the monthly payments again. This will enhance your credit score and make you creditworthy in the near future.
Though the unemployment rate is still lagging behind, yet you have to manage your personal finances in order to repay your loans on time. Just like credit card debt consolidation relieves the debtors of their rising high interest debts, student loan consolidation also helps students with their surging debt burden.