More and more college grads want to consolidate student loans to ease the pressure of monthly payments. When you have multiple student loans, you need to be constantly on your guard to be sure that you pay back your monthly installments. It could also happen that occasionally you might miss out on some payments due to financial difficulties. When you consolidate student loans, you greatly ease your financial worries, making sure that you pay promptly on time. One of the major problems that grads with multiple loans face is that of keeping track of multiple payments and their respective due dates.
The crucial thing to ask here is do you have a good idea of consolidating student loans? When you consolidate student loans, there could be many benefits as well as certain drawbacks. It is important that you know everything about consolidating student loans before you decide to go for it.
The important question is: How does student loan consolidation work? The process is quite simple; as soon as you graduate from college, you begin repaying your student loans. This means keeping track of all your multiple loans and paying them in installments one by one. When you consolidate student loans, you combine all your loans into a single installment. This makes it convenient for you to keep track of all your payments under one single loan program. This is an ideal situation to be in when you have just graduated and have started working. When you consolidate student loans, you also get a low interest rate (in most cases) and extended time to repay your loan. This could help you save a lot of money and keep payments lower throughout the loan term, and that is always a good thing when you are starting out in your chosen career.
One of the best things about consolidating student debt is the extended repayment time that you get. The period of repayment can be extended up to 30 years too depending on the nature of your loan.
When you plan to consolidate your college debt, you can be sure that there will be benefits as well as drawbacks. If you take advantage of the grace period of six months and consolidate within this period, you gain from a low interest rate. The downside to this is you will have to give up on the remaining part of the grace period and begin paying before the end of the next sixty days. However, there is a good way of consolidating by the end of the grace period in a way that brings you all the benefits. Discussing with your lender about all the possible options will help you settle on a good deal.
So is it worth it to consolidate? The answer really depends on your situation, but what is is for sure is that all grads (or college drop outs with student loan debt) should at least consider refinancing their college debt into a single loan. It may save you money and lower your payments, so why not check into it?