Student Loan Consolidation: Lowering the Cost of Education
Making it through college is a tremendous accomplishment and you should be proud of yourself. While your degree makes you more valuable on the job market, your credit probably took a bit of a beating by way of student loans - am I right? Sure, without them many people wouldn't have been able to afford college in the first place, but now that you're out and on your own, what do you do about that mountain of debt? Fortunately, there are student loan consolidation programs to help you manage your debt without going broke in the process.
What does a student loan consolidation program do?
A student loan consolidation program combines loan debts and allows the graduate to make one monthly payment instead of several separate payments. In most cases, this reduces monthly debt by up to 50 percent or more. The amount of the total loans and specific consolidation program will dictate your precise savings.
In addition to one payment, it is also possible that you might qualify for a lower interest rate, saving you even more! By consolidating your student loans, you are helping improve your credit score because each of the individual loans that are part of the program will be reported to the credit bureaus as paid in full, leaving you with one loan on the report.
Do student loan consolidation programs accept loans that are in default?
Not all consolidation programs accept loans that are in default, but there are programs that are designed specifically for that purpose. In order to take advantage of these programs you will most likely be required to join a credit counseling program that will help you to make better financial decisions while rebuilding your credit.
Money management is not something most people want to do, but credit counseling may benefit you, especially when considering defaulted loans that will be paid off. The hassle of harassing mail and phone calls from creditors will be eliminated. This will help you while working with a consolidation counselor to repair your credit history to a positive report.
Federally - backed Consolidation Programs
Even student loans that were issued by the government (as opposed to a bank) are eligible for federally backed consolidation programs. You probably already know that most government loans have a lower interest rate and they are usually easier to get than conventional loans, so it's good news all around.
Consolidating all of your student loans and combining them into one loan will usually qualify the loan for lower interest rates due to financing a larger amount of debt. The life of the loan may be extended (meaning that it will take longer to pay it back), but the benefit is paying less money out of pocket every month. New college graduates may not make the greatest salaries right out of school, and spending less money while trying to get a foothold in the job market can make the transition easier and more affordable.
Article Source: http://www.search-raven.com
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