Student Debt Consolidation has become a common practice and lenders are doing all they can to attract customers to their programs.
Student Debt Consolidation has become a common practice and lenders are doing all in their hands to attract customers to their programs. Student Debt Consolidation meets its purpose of reducing both the applicants overall student debt and particularly the amount of the monthly payments making student debt more affordable. Yet, lenders are offering further benefits and savings on student debt consolidation.
When you choose to consolidate your student debt you are seeking a friendlier repayment program, a debt reduction, lower monthly payments and most of the time all of these altogether. This, however, doesnt imply that you should go for the first offer you receive, by searching around a little you can obtain further savings and benefits like the following:
Significantly Reduce Your Monthly Payments
By consolidating your student debt, incredible reductions on your monthly payments can be achieved. There are student debt consolidation programs that can offer you reductions on your monthly payments of up to 60%. Bear in mind though, that nothing comes at no cost and youll probably end up paying higher overall amounts in terms of interests over the whole life of the loan if you obtain the reduction by extending the repayment program.
Low Interest Rates And Additional Rate Reductions
You can obtain an interest rate as low as 5.25% on your student debt consolidation loans and sometimes even less. But many lenders offer additional reductions on their benefit programs if you meet certain requirements like debit on bank account of the monthly payments. These additional reductions can reach up to 2% but the average reduction you can obtain is around 1.25%.
No Fees and No Penalties For Pre-payment
Many lenders are offering no fees at all for consolidating student debt. And most importantly, since what most applicants want is to be able to become debt free as soon as possible, they can take advantage of those student debt consolidation programs that have no penalties for repaying your debt earlier. Thus, you can become debt free sooner and save thousands worth of interests.
Deduct The Interests On Your Consolidation Loan From Income Tax
Another great benefit you can obtain when consolidating your student debt is that the interests on your student debt consolidation loan are Income Tax deductible which implies high savings. Bear in mind that we are talking about the Federal Income Tax only and not other taxes which may or may not include this benefit. Youll need to contact local agencies in order to know whether there are additional deductions you can make on your taxes.
Additional Benefits For Graduated Students
Once youve graduated you can obtain additional benefits if you decide to consolidate your debt. This includes further interest rate reductions and other benefits like forbearances. For example: you can obtain up to a 1% interest rate reduction if you decide to consolidate your student debt while you are still on your grace period. This implies starting to repay your debt right away but grants you huge savings on the long run.
As you can see, there are many benefits that student debt consolidation provides to those who decide to take that path. Thus, if you have accumulated student debt and you want to ease your financial situation, dont doubt it. Student debt consolidation is definitely the way to go.