Consalidating student loans
Depending on the type of loan that you are considering taking out, consolidation may potentially lead to paying more total interest, having a larger total loan repayment amount, and receiving more strict repayment penalties.
If you are currently in the grace period on your student loans, consolidation will negate this period and throw you immediately into repayment.
This means that you must be currently in repayment for your student loans and making payments, or within the allotted six-month grace period before entering repayment.
Applying for student loan consolidation will also require that you have good repayment history on your loans and have not defaulted.
Most obviously, you'll have only one monthly payment to worry about, and if you have strong credit, you might be able to find a lower interest rate when consolidating or refinancing your student loans.
However, student loan consolidation has its drawbacks as well and isn't a smart move for everybody.
If you decide that consolidating student loans is the right fit for you after weighing the pros and the cons, it is important that you beware fraudulent lenders, avoid any lenders charging upfront fees, and carefully examine all details to find out exactly what you are signing yourself up for.
Not only can consolidation lead to a lower interest rate with improved credit scores, but it also offers the opportunity to open a new loan with a fixed rate of interest instead of variable rates.
So, if you've already made several years' worth of payments under the plan, you'd effectively be starting the clock over.
Private student loan consolidation has become much more prevalent over the past few years.
As the Class of 2014 has already been crowned the most indebted in history with a whopping average student-loan debt of ,000 before receiving their tassels, more and more college students are considering consolidating student loans in an effort to save money.
Student loan consolidation is defined as a process in which individuals take out a new loan to pay off existing student loans and work on repaying the single large loan.
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Graduates only have the option to consolidate loans that hold their name, so it will not be possible to consolidate loans with your spouse, parents, or any other family members.