You are getting a few student loans to support your study. After the graduation, you need to start repaying these student loans. These student loans come with different interest rates and they have different repayment due dates for each month. You may find it difficult to manage your multiple student loans and any late payment or miss payment may hurt your credit rating.
Student Loan Consolidation Program is a loan repayment program for college students and graduates with multiple student loans to make their repayment easier. However, before signing on the dotted line, it’s important for students to understand some basic facts about consolidation.
What Does a Student Loan Consolidation Program Do?
The student loan consolidation program allows you to combine all your outstanding student loans. For example, if you have three separate government student loans, you can consolidate them into one single loan. Technically, all three of those loans will be considered paid in full and a new loan will be started in their place. The basic concept is you are getting a new loan to pay off all your outstanding student loans; which mean instead of having 3 student loans with 3 repayment amount and due date, after the loan consolidation, you only have one loan with one repayment amount and one due date. It will enable you to manage your loan easier.
How A Student Loan Consolidation Program Will Help?
By consolidating your outstanding student loans through student loan consolidation program, you basically can enjoy at least 3 benefits:
1. More Convenient
With multiple student loans, you will have to make multiple payments every month; that means there are more paperwork and due dates to keep track of. There are more chances that you may miss one of them and cause you to make late payments. You can get rid of this hassle by consolidate them into single repayment and make it easier to keep track of only one payment with one due date and one repayment amount.
2. Save You Some Money
All loans come with interest, so do the student loans. Although student loans normally have lower interest rates, student loan consolidation programs may be able to negotiate a lower interest for your new consolidation loan than all your current loan rates and save you some money on interest. For example, you have 3 outstanding loans may be required to make $150 payments each month to all three lenders. That is a total of $450 per month. After consolidation with only one payment is required and that payment is usually much less than the combined payments from all of the loans. This can be a huge benefit to you especially if you are a new graduate who is just getting started in your careers and who don’t have the income necessary to cover large loan expenses right away.
3. More Repayment Possibilities
Consolidating your student loans may open up additional opportunities for you. You may be offered with deferment choices and/more repayment possibilities. These offers can come in handy if you wish to further your education to another level, struggling to find employment in your field or experiencing financial hardships.
Managing your multiple student loans is not too hard but you can make them more convenient and easier to combine them into one through the student loan consolidation program and enjoy the benefits it can offers. However, before enrolling in any of the student loan consolidation programs, you need to understand the details and ensure the package is really inline with your financial needs.