Student Loan Consolidation Info

Benefits of Student Loan Consolidation

Benefits of Student Loan Consolidation

Student loan consolidation offers many benefits to the student. Lower monthly payments, fixed interest rates, one monthly payment to one lender, flexible repayment options (like extended repayment, deferment, and forbearance), and potential borrower benefits, depending on which lender you are borrowing from are just a few of the reasons to consolidate your student loans. That's not to mention that in-school consolidation just recently became an option for student borrowers, whereas before it was only an option for borrowers in the repayment phase or grace period. Your monthly payments may be as much as 60% lower than unconsolidated loans, with drastically lowered interest rates on your single payment.

Among the benefits of student loan consolidation are lower monthly payments due to the extension of the life of your loan and a lower fixed interest rate. You will save money monthly and be able to put more of your money toward things you need now. Although your total interest paid will increase over the extended life of a loan, you will get to keep some money at the end of the month, so you are not overwhelmed with debt.

Another benefit of student loan consolidation is the crunching of all your payments so that they become one payment to a single lender each month. You don't have to worry about all the paperwork and all the separate payments. There is simply one payment. It eases your mind and clears clutter.

Additional benefits of student loan consolidation are flexible repayment options. Depending on your lender, you will most likely have the option to extend the repayment term, defer fees, or qualify for forbearance, which happens when a private lender allows you to postpone payments based on specific qualifications and agreements. As mentioned before, the extension of your payment terms lowers monthly payments, and keeps more cash in your pocket. Deferment of a fee is when the fee is postponed, usually for a set amount of time (typically about 36 months). These options can lower your monthly payments and lower your interest rates.

There are some other potential borrower benefits possible with your student loan consolidation. Some lenders offer lower interest rates to loan accounts which have been set up with automatic payment plans and which have made regular on-time payments for a certain length of time.

In-school consolidation is one of the newer benefits of student loan consolidation. Now sophomores, juniors, and seniors have the option of consolidating loans while still enrolled in school, rather than waiting until the borrower has entered the grace period or repayment term. These are a few of the many benefits of student loan consolidation; you will save money and simplify your life.