The economy has made it rough for students to pay back their student loans. Learn how you can make your student loans more affordable.
Most newly graduated students are in for a big shock when they get out of school and suddenly their student loans that have accrued over the course of their academic career have come due. Repayment of student loan debt can look staggering at first glance, but through student loan consolidation, you can make your monthly payments easier to manage and easier to afford on an entry level salary. It is altogether possible that you might have lost track of the amount of money that you had borrowed while you were attending school; this is completely common among young students who are less interested in figures and more concerned with getting their education.
Student loan debt can pile up fast and many students owe $100,000 or more when they get their degrees. Starting out their new adult life shrouded by debt, many recent grads find that they are being asked to pay more on their student loans than they are actually bringing home as income each month. You likely owe multiple lenders and must write separate checks or make separate payments to each, usually with different due dates. It can be expensive and frustrating to keep up with multiple loans. Student loan consolidation can help you better manage your student loans, making you a more successful borrower.
Benefits Of Student Loan Consolidation
Student loan consolidation is a fairly straightforward and simple process. The student loan servicer will take all of the student loans that you owe to multiple lenders and pay them off in full, paying the principle balance. You will make one payment to the loan servicer each month in lieu of paying multiple lenders. You can consolidate private and government student loans. The benefits of consolidating student loans are varied and many. Obviously, it is much more convenient and less of a hassle to send one payment in to one lender. But perhaps more beneficial is the fact that you can usually negotiate to a lower rate of interest when you consolidate your student loans. This is particularly helpful for more expensive private student loans that may have a higher interest rate than government loans. Most consolidation loans can be renegotiated to as low as three to four percent.
Another benefit of consolidation of your student loan debt is that you can reduce the total amount that you must pay each month to more readily fit in with the actual income that you are bringing home. Your student loan debt should only take a small percentage of your gross income each month. This can allow you to build better borrowing habits by allowing you to avoid the use of credit cards because you will not be using all of your income for loan payments.
Paying off your student loans is important, but it does take time. Student loan consolidation can keep you on the right track by allowing you to make affordable payments. Paying less interest will mean that you pay your loans off faster because more of your payment amount is going toward actual principle owed. Student loan consolidation is an option that you should explore and consider if you have a massive amount of student loan debt.