Student loan consolidation tips
Students will often accumulate a number of loans throughout their student life, while these are often essential and can make life easier, when it comes to paying them back they can cause the student many sleepless nights and great anxiety. If you have more than one loan then very often a loan consolidation plan can be the best way to go, by consolidating loans students will only have one repayment to make rather than several and this can often be easier to manage. A lot of time and effort can be saved not to mention less stress and anxiety over missed payments.
A lower interest rate
Another benefit to consolidating the loans is that the consolidated student loan will carry a smaller interest rate than all the other loans put together. This is also easier because now the student will not have to worry about having to manage different rates of interest, as it will be combined into one simple monthly payment. A consolidated loan will usually offer more flexible payments options than other loans do and are usually free of any repayment penalty.
Your credit score
The actual loan repayment rate will vary depending on the financial situation of the student and it is normally very easy to get a consolidation loan if you have a credit score of higher than 660. The lenders monthly plans will differ on the individual student’s situation and it is worth shopping around for the best deal as this could save you 50% on some lenders monthly plans.
It is worthwhile taking your time and reviewing all the terms and conditions set out by lenders and choosing the monthly plan with the simplest repayment options and a monthly repayment that you can easily afford.
Choose a fixed rate interest option
Wherever possible choose a consolidation loan which offers a fixed interest rate rather than a floating one, by doing so you are eliminating any uncertainty and you will always know what you have to pay out each month.
Of course, it is only common sense to go with a lender who is offering the lowest fixed interest rate with a repayment plan that suits you. You should always remember that the rate of interest and the monthly installments would be calculated on the duration of the loan so the longer you take the loan out then the more you will pay in the long run.
You should also take into account the amount that you have repaid of your loans before considering consolidation because if you have repaid a major part of your loans then consolidating could cost you more in the long run.