A single horse is superior to several donkeys as it could execute equivalent amount of labor, and is also very easy to manage and control. That’s precisely how student loan consolidation could work for you as it collects your different loans, places them in one basket and makes it into a single loan. As opposed to making multiple repayments, you have to make just one payment every month. You have a new rate of interest, and you could go for extended loan repayment period which will reduce your monthly repayment burden.
Highlights
The Student loan consolidation can be carried out to combine students or parents loans but are not interchangeable, for a student loan cannot consolidate with parent loans, and vice-versa. You need to pay the minimum higher rate of interest, as you pay the average of the rates of interest you’re paying on various loans to which you add the rounded up figure of the nearest 1/8th of 1 percent. Debt consolidation could also be done on just one loan but there are a few specifications attached to it, and if you want to reconsolidate your current consolidated loan you must add at least one more loan to it. Another attractive feature of student loan consolidation would be that it breaks the shackles of previous 10 year payment limit and permits you to extend your payment term from 12 to 30 years.
Benefits
It’s a better choice if you are living on a prayer for paying your monthly installments. As, if any calendar month your prayer goes un-answered and you fail to make your monthly payment, it is not fantastic news for your credit score. And when your pay hike still a distant dream, you could frequently fail on the payment which will further give your credit score a royal thrashing.
However, when you’ve got secured a consolidated loan you happen to be given a breather since you can easily clear off all of your pending loans and get a new lease of life. You enter into a new loan agreement with long-term payment deals which brings down the monthly payments. Though, it is best to stay with the plan of paying off the loans in a timely manner, for long durations would mean you wind up repaying a lot more amount than you actually intended.
How to Apply
Applying for student loan consolidation is no mustards to grind, just check out StudentLoans.gov online, where you move through the self guided process and submit your application form. Or, you can download the application and once filling it you email your application at the their address. For your questions the door of the loan service provider will be the one to knock.
There are actually private lenders too who can carry out the consolidation of loans for you, however, if they ask for any kind of advance payment you should consider them as taking you for a ride, for there isn’t any advance fees for federal education loan consolidation. While other education loans, including the Stafford and PLUS loans, could impose some fees, the fees would be deducted from the disbursement check later.
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