Some times with student loans some people can sometimes be of the opinion that loan consolidation seems like too much hard work, so they sometimes leave all their existing loans as they are and try to cope with all those payments.
In actual fact, consolidating your existing student loans is not hard at all. It just takes some careful research, to find the right lender that will help you save the maximum amount you can save.
Of course the benefits of consolidating your debts can be significant. Consolidating can save you many hundreds of dollars.
Benefit 1: Less Worry & Stress
Consider the amount of bills you are paying month in and month out. How many of them are from different loan institutions? Like many other people, you may not like keeping track of all your bills that always seem to arrive at many different times throughout the month. Consolidating your loans will solve this for you – you only have to make one payment each month.
Benefit 2: Your Payments will be considerably less.
Bearing in mind that your consolidation rate is usually calculated to be the average overall rate of your existing loans, the resulting consolidation rate can be usually a little less. Which means that your monthly payments will be lower.
Many students and younger graduates often try to compare many different financial institutions with the hope of finding the best rate. But in fact all these lenders must offer you the same interest rate as the Federal Family Education Loan Program. However, most lenders offer more benefits on top of this as well.
Many lenders will tend to reward you with a higher reduction of interest when you setup a direct bank withdrawal. Remember to always pay on time – you can often get a further reduction of up to 1 percent on your existing interest rate when you pay before the due date. This will mean that you will benefit from substantial savings.
Benefit 3: Improved credit rating
Trying to pay off many loans at once can sometimes lead to you missing one of the payments. This will lead to tarnishing your current credit rating. And, if you have poor credit rating, it will be harder to get new credit in the future. However if you consolidate your existing loans and pay just one bill and you do that on time you will start to build a better credit rating.
So, with student loans there is every reason for you to consolidate them. Another thing to bear in mind is that you must choose your new lender carefully. Because often times consolidating loans is usually only allowed once. Sometimes there can be a couple of exceptions to this:
1.You decide to take another loan to study more
2. Some of all your debt was not included in the first loan consolidation.
Just because you may see a better offer further down the road you may not be able to make further changes. This is the reason that you should look at the small print so there will be no speed bumps later.
A few lenders can offer more attractive benefits (or so it may seem), but they may come at the expense of more fees.
Of course, another thing to consider is that you also look at alternative methods for raising capital so you can pay of your loans even quicker than normal. You can often find many methods available online, such as:
1.Start an online business (you can often set up some of these at no cost to you, using free methods)
2. Consider a Crowdfunding venture. (you may be surprised at how many strangers will help your cause)
You must take the time to consider your student loan consolidation very carefully to take advantage of all the systems in place to help you.