To most of the fresh graduates passing out from colleges, it’s definitely a painful issue to pay back those hefty loans which they’ve taken to support their college/university studies. If you’re one amongst them and paying multiple rates to multiple loan agencies, you definitely know how it feels. Did you know you can easily save thousands by consolidating your student loans? In fact, you can either go for private or federal student loan consolidation. Comparison of student loan consolidation programs is now easy as you can do that online on many websites.
Primarily, you must have a clear knowledge about the total loan amount and the accumulated interest. Now just add up everything and …..voila! You’ll see before you a lifetime of debt. But there’s no need to fear, as student loan consolidation is the best way to go and will come to your rescue! The final amount you have before your eyes is your starting point for choosing the best program for your needs. The monthly bill to be paid should never be more than 20 percent of your monthly earnings. You still have to live a decent life, don’t you? Your primary focus should not be jus ton paying off your debts, but also to live a moderately comfortable life.
There are many loan agencies that work in the US market. Federal loan consolidation is available to you from federal government. It doesn’t need a co-signor or credit check because this consolidation program is protected by federal government.
Private student loan consolidation programs are offered by credit unions, banks and loan agencies. Depending upon the loan agencies, you might have to get your credit history check or provide a co-signer.
How they work?
Both these programs are highly useful as they are meant to combine your multiple loans into one single loan so that you can enjoy just one lower monthly payment at a lower interest rate. For federal student loan consolidation programs, you can only combine federal loans. But in case of private student loan consolidation, you can easily consolidate your student loans together along with your personal loans.
Besides that, when you’re opting for federal student loan consolidation, you’ll get lowest rates that will lock for the whole loan period. For private student loans, however, your rate might fluctuate at a market rate. You can also talk to the loan agency to look at the possibilities of getting the lowest possible rate.
Credit History for Student Loan Consolidation
Your credit history is important and with a student loan consolidation program you can easily add few extra points to your reputation. If you’ve a big loan and you are always late on your monthly payments, you know everything will be registered on your credit card.
With easy student loan consolidation, you’ll be easily able to pay the full amount with just one monthly payment. You will also save good monthly and can also boost your credit score.
When you are comparing various student loan consolidation offers, try to pay some attention on the benefits as they can ease your life considerably. For instance, you can benefit from reduced interest rates for making regular payments, automatic debt repayments or online application filing. So it’s up to you to decide on which of these benefits will help you with your financial issues.
As discussed above, you can also improve your credit score with student loan consolidation. This is so because with loan consolidation you’re being seen as servicing one big loan instead of multiple loans.
Though you will get lower rates with federal student loan consolidation, but you can always negotiate with private agencies to see if there’s some alternative available to you to get a better interest rate.