Consolidating Student Loans May Alleviate Debt Faster But It’s Not For Everyone

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Consolidating Student Loans May Alleviate Debt Faster But It’s Not For Everyone
03/01/2010
By Steven Craig
Many students will often walk out of college with some form, or more likely forms, of student debt in the nature of student loans. Student loans are necessary for the majority of students who desire a higher education but the debt that is carried by college graduates is an unwelcome introduction to the “real world.”

Some students that are lucky leave college with a small amount of debt, but student loan debt can sometimes cost anywhere from twenty to thirty thousand dollars or much more. If there are multiple forms of student loans, or loans from various lenders, consolidation may be the best bet for a college graduate.

Keep in mind that you have a grace period and don’t want to consolidate before that because, more than likely, you will be required to start making payments. Also, different loans will often not consolidate, like private and federal loans, so look into the types of loans you have.

There are those who will also tell you that consolidating loans will cost you more in the long run. This can actually be true if the repayment plan on your consolidated loans is stretched out. Consolidating student loans can bring about a lower interest rate, but if the repayment plan is drawn out over years and years, you may end up paying more than if you keep a few loans separate and pay them off quickly.

However, you may also be able to consolidate your student loans for a low interest rate and pay well over the required monthly payment to get out of debt in a timelier manner, but be certain there is no early payment penalty.

Look over what consolidators will offer you in terms of interest, length of consolidation repayment, and the monthly amount owed and compare that with what you would pay, the time it would take, and interest if you kept your student loans separate. Doing your homework with your student debt is going to pay off and help you make the best decision for you.

This entry was posted on 03/01/2010 at 6:00 am and is filed under Banking/Finance, Loan Modification. You can follow any responses to this entry through the RSS 2.0 feed.