Student Loan Consolidation

Student loan consolidation could be a great option for you if you are paying off existing student loans.

Many students often leave college with large debts, often from multiple lenders.  The burden of the debts and repayments can put individuals under severe financial pressure for many years..

In simple terms, student loan consolidation allows you to combine all of your student loans into one single loan, often at a lower rate of interest than the existing loans.  The benefits of student loan consolidation are therefore reduced monthly payments, and a reduced number of payments to make and worry about.

Having just one loan after consolidation makes it much easier to manage and keep track of your finances.  Budgeting becomes much easier.

Student consolidation loans usually come with a fixed lower rate of interest compared to your existing student loans.  Again budgeting is made easier after consolidation for two reasons. 

Firstly your repayments are fixed, therefore you know exactly how much you will be paying through the term of the loan, rather than facing the uncertainty of variable rate loans.  In addition, the lower rate of interest means you will free up cash on a monthly basis from the reduced repayments, definitely making budget management easier!

Student consolidation loans also usually offer flexible repayment terms and no fees, charges, or early repayment penalties.  Administration is also fairly straight forward when making the application, credit checks and co-signers are not usually necessary for consolidation loans.

When arranging your consolidation loan, you can choose a repayment term up to 30 years.  You need to weigh the benefits of reduced payments against the increased interest you will pay over an extended loan term.

To get a student loan consolidation, you can apply through any bank or credit union that participates in the Federal Student Loan Program. Regardless of who you choose to apply to, the loan terms and conditions are usually the same.

Under the rules of federal student loan consolidation you are only able to perform the consolidation process once.  Therefore, you should make sure that you choose the best deal first time. The interest rate will be the same from all lenders, but some lenders may offer future rate discounts for prompt payment and a discount for having monthly payments directly debited from your account.

The option to consolidate your student loans is available during your six month grace period or once you start to repay your student loans.  

Further links:

Apply For Student Loans

Student Consolidation Loans