Five Ways Consolidating Student Loans Can Save You Money

Five Ways Consolidating Student Loans Can Save You Money

Five Ways Consolidating Student Loans Can Save you​ Money
Consolidating Student Loans Can Boost your Credit Score
Most students take out numerous loans for college,​ each with its own interest rate and its own monthly amount .​
the​ plethora of​ different loan sources is​ a​ great benefit in​ terms of​ paying for college,​ but when it​ comes to​ credit rating,​ this long list of​ outstanding loans can put a​ serious damper on​ your overall score .​

By consolidating student loans,​ your credit report will show one combined loan,​ usually with a​ much lower overall payment,​ which equates to​ a​ more favorable credit rating .​
By consolidating student loans,​ you​ most likely also benefit from a​ much lower payment,​ thus lowering your debt to​ income ratio.
Consolidating Student Loans Reduces Debt to​ Income Ratio and Increases Buying Power
Having a​ low debt to​ income ratio,​ or​ the​ monthly amount owed compared to​ the​ amount earned,​ makes an​ incredible impact on​ the​ amount of​ money you'll be able to​ borrow and afford for a​ first home or​ reliable transportation .​

The total amount of​ household debt in​ the​ US last year was more than 100% of​ disposable income .​
Rising education costs have created a​ vicious cycle for today's graduating students .​
as​ your debt to​ income ratio rises,​ so do the​ interest rates of​ each new loan .​
Keeping this ratio low by reducing your monthly bills can literally save you​ tens of​ thousands of​ dollars over a​ lifetime .​

Consolidating Student Loans Reduces Dependence on​ Credit Cards
Having lower bills in​ the​ years following college means less reliance on​ high interest credit cards and other loans .​
the​ average college student carries a​ whopping 6 credit cards with a​ total balance over $2100 .​

This means that the​ $100 credit card purchase for new work attire could cost more than $200 over the​ 12 months it​ takes to​ pay the​ full balance .​
Fortunately,​ smart financial planning,​ including consolidating education loans,​ can help students and young professionals live a​ life free of​ high interest debts.
By Consolidating Student Loans,​ you​ are Locked into Today's Low Fixed Rates
Just because interest rates are low today doesn't mean they will stay that way .​
in​ fact rates over the​ last several years are lower than they've ever been in​ recent history .​
It's amazing how much a​ small percentage point can save or​ cost on​ a​ college education bill over the​ course of​ a​ loan repayment.
The Federal Consolidation Loan allows you​ to​ lock into today's low interest rates when consolidating student loans .​
Consolidation loans usually have a​ longer repayment period and a​ lower monthly payment than is​ available on​ the​ underlying education loans .​

By Consolidating Student Loans,​ you​ can Receive Additional Interest Rate Discounts
Companies that specialize in​ consolidating student loans like offer additional consolidation benefits such as​ auto payments,​ and consecutive payments .​
Auto Payments: Receive a​ reduction in​ your interest rate for making your payments automatically from your bank account when you​ consolidate your student loans.
Consecutive Payments: Some student loan consolidation companies give you​ the​ opportunity to​ reduce your repayment interest rate up to​ one full percentage point by simply making payments on​ time.
No Interest Deferral: Take advantage of​ the​ flexibility of​ student loans by deferring loans during qualified times .​
While enrolled in​ graduate school,​ serving in​ the​ military,​ or​ volunteering with the​ Peace Corps,​ you​ can not only defer payments,​ but stop interest from accruing as​ well.
Grace Period: Consolidating during your grace period allows you​ to​ lock in​ a​ rate that is​ lower than the​ standard repayment rate.

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