Consolidating federal student loans good idea
A single loan can prevent missed payments and help streamline the entire process.Additionally, consolidating private student loans may allow you to lock down a lowered interest rate, thereby saving money over the life of your loan.If you have poor credit or are behind in your student loan payments, you may not qualify for consolidation or may be offered an interest rate that’s not much (or any) lower than your current interest rate.Additionally, if you’re unemployed you may also have trouble qualifying for consolidation.As a holder of student loan debt myself, my interest is always piqued when I see an opportunity to ease the burden of student loan debt.That being said, I’ll be the first to admit that I was a bit skeptical when I first heard about student loan consolidation.As for private student loans, your consolidation rate will depend on your credit, which may or may not result in an interest rate that’s lower than your current.Extension of repayment can cost more over the life of the loan Many student loan consolidation companies offer several repayment options, which means you may have the option to choose an extended repayment plan.
In the case of private student loans, it can be challenging for some borrowers to qualify for consolidation, particularly borrowers who have a lower credit score or who don’t earn above a certain annual income.
But after researching and reviewing the opportunities available, I started to understand more about the various options and also more about who specifically can benefit.
Importantly, I learned that student loan consolidation can be a great option for some.
“The smart thing to do is consolidate your student loans…Consolidate Your Student Loans…CONSOLIDATE YOUR STUDENT LOANS.” Not without good reason.
Bunching all of your loans into one big pool can allow you to find a lower interest rate and a lower monthly payment through longer terms.
That being said, you may meet the set of requirements no problem and be able to lock down a lowered interest payment. As mentioned above, student loan consolidation takes away some of the protections attached to federal loans.