What You Need To Know About Consolidating Student Loans

What You Need To Know About Consolidating Student Loans



What you​ Need to​ Know about Consolidating Student Loans
Chances are if​ you’ve taken out student loans in​ order to​ finance your education you​ have been,​ or​ at​ least will be,​ receiving calls and offers in​ the​ mail to​ consolidate your student loans .​
There are actually numerous advantages to​ consolidating your student loans .​
In addition to​ gaining a​ fixed interest rate you​ can also potentially lower your monthly payments .​
In the​ event that you​ begin to​ experience financial difficulties,​ you​ may also be able to​ take advantage of​ flexible payment options with a​ consolidated student loan .​
Unlike other types of​ debt consolidation programs a​ student loan consolidation gives you​ the​ opportunity to​ combine your loans into one package with more attractive terms .​
You also don’t have to​ worry about being turned down because of​ a​ bad credit score and the​ interest on​ the​ loan may be tax deductible .​
In addition,​ in​ the​ event of​ your death your survivors won’t have to​ worry about paying it​ back because the​ debt will be discharged .​
If you​ have a​ variable interest rate student loan,​ consolidating the​ loan can also help you​ to​ lock in​ a​ lower rate before the​ rates increase the​ next year .​
Over the​ length of​ the​ loan,​ this one step can actually help to​ save you​ a​ tremendous amount of​ money .​
Of course,​ in​ addition to​ the​ advantages there are also some disadvantages of​ which you​ should be aware .​
One of​ the​ most important is​ that if​ you​ end up lowering your monthly payment you​ are actually extending the​ length of​ the​ loan and that means you’ll pay more over the​ life of​ the​ loan due to​ increased interest .​
You can still take advantage of​ the​ other benefits of​ a​ student loan consolidation without this disadvantage; however .​
Just don’t lower your payments unless it​ is​ really necessary .​
When considering lenders for a​ student loan consolidation it​ is​ important that you​ always compare the​ terms of​ each offer made to​ you​ .​
Consider the​ interest rate and length of​ the​ repayment terms to​ be sure you​ are getting the​ best deal possible .​
If you​ have a​ mix of​ both federal and private student loans,​ you​ should also be aware that while both types of​ loans are available to​ be consolidated it​ may not be a​ good idea to​ consolidate your federal loans and private loans together in​ the​ same package .​
There are stipulations on​ private loans that are not required on​ federal student loans,​ such as​ no deferments,​ no tax deductions on​ the​ interest,​ no forgiveness of​ the​ debt in​ the​ event of​ death and no forgiveness of​ the​ loan for working in​ certain fields .​
In the​ event of​ a​ mix of​ private and federal,​ it’s usually best to​ go ahead and consolidate the​ private loans separately from the​ federal loans so that you​ can retain those advantages for the​ federal loans .​
By understanding all of​ the​ factors related to​ student loan consolidation you​ will be in​ a​ better position to​ make a​ more informed decision regarding your finances.




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