Student Loan Cosolidation Benefits

Many Benefits of a Student Loan Consolidation

When you think of a student loan consolidation many benefits come to mind. And there is no time like the present to consolidate and take advantage of those benefits.

The first one and the most important one is the lower monthly payments. This will of course depend upon which lender you use and your specific loan situation, but you could see your monthly payments lowered by 54%!

The next benefit you will enjoy is the fixed interest rate. The rates on the Federal Stafford and Federal Plus loans vary each and every year, the rate on a federal consolidation loan is set at a fixed rate for the life of the loan. This rate would be weighted on the average rate on your eligible loans rounded up to the nearest 1/8^th of a percent.

If you are making several payments to lenders now a consolidation loan would have you make one payment to one lender. That would certainly make life simpler.

Also if you have accrued a lot of student loan debt, a federal consolidation loan may just permit you to extend the repayment period. Now according to what your loan balance is, you may even be able to extend that repayment period up to 30 years. Of course you know that the longer it takes to repay that loan, the more interest you pay on it.

Some student loan companies offer life-of-loan servicing. That means that they will never sell your loan to another company. However it will take some research on your part to see which companies offer that service.

Also some consolidation programs give borrower benefits, such as auto pay reduction or an on time payment reduction that, if qualified, will enable you to save an additional 1.25% off your rate. This will have to be researched too to see who offers this benefit.

So you can see that there are many benefits to student loan consolidation. Take advantage of them now.