When a given student initially applied for a number of student loans from different providers and organizations, each student loan provider or agency offered different interest rates as well as a term or time period for loan repayment. The concept of a student loan consolidation is to take all the different student loans and put them all into one simple, convenient loan. Then the student will only make one payment each month for all loans incurred, rather than individual or multiple loan payments each month; with this, the student will save time and money. With a much lower interest rate and fewer checks to write each month, these are some of the advantages of a student loan consolidation.

Why consolidate student loans?

In general, people apply for a student loan consolidation to lower their payments each month and save money over a cumulative period of time. Each one comes with its advantages and disadvantages, so it’s up to you to examine each one carefully before deciding which one you think is right for you.

When you want to slash your payments each month, you can often do so by extending your repayment term beyond the standard 10-year term for a federal student loan. However, this means that you will eventually pay more or additional interest in view of the fact that you will be paying over a longer period of time.

On the other hand, when it comes to providing instant payment assistance, student loan consolidation can be a useful tool; If your goal is to save over the long term, setting a low rate now but not extending your payment period is the best way to go. The faster you pay off your student loan, the more money you can save. You are even given the option to pay beyond the required amount or the prerequisite; there is no penalty on payment. However, a potential drawback to this choice is that your payment each month could still be the same as, or even higher than it was before you consolidated your student loans.

5 Student Loan Consolidation Features

1. Lower payments each month. Depending on the situation and the type or nature of the lender you have chosen, you can lower or lower your monthly payments by as much as fifty percent.

2. Have simple and convenient loan payments. Through consolidation, you will only have one check to write each month to pay off all of your loans.

3. Have fixed interest rates. With certain federal student loan consolidations, one can have a permanent fixed rate on a student loan. That is why it is good to do your research first before deciding to receive and understand the best interest rates, as well as the best term that is right for you. Go online to get an estimate and calculate the best student loan consolidation interest rate that will be based on current rates.

4. The payment period can be extended. The choice is yours; You may be able to lengthen your payment period up to thirty years. Keep in mind that you will pay more or additional interest for that accumulated time of your student loan consolidation. The concept of this is to gain some control until you are stable with your career. Then you can focus on making money instead of making multiple monthly student loan payments.

5. Consolidation arrangements within the school. While still in school, qualifying students can get a low interest rate. This allows you to move to the payment status; however, since you are currently in school, your payment will be automatically deferred. The downside to this is that you lose your six-month grace period. The solution is to appeal for leniency for a period of up to 1 year.

Student loan consolidation can help ease the burden of multiple monthly bills. Just take some time to educate yourself on the pros and cons and you can get your financial situation in order. This in turn will help you focus on your education.