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3 Key Reasons to Consolidate Student Loans
If you’re like most recent college graduates, you’ve got a large chunk of student loans to pay back. You’ve likely heard about consolidating your loans and how it’s something you should do. But do you know why? This article will explain 3 key reasons why student loan consolidation is something you should seriously consider.
1. Low, Fixed Interest Rates
Consolidating your student loans will lock you in to a low, fixed interest rate. This means that if your loans are currently ranging from say 8-12% and vary from month to month, consolidating will lock the interest rates at a fixed amount (maybe 8%) and it will stay that way for the entire life of the loan.
This is helpful when budgeting your finances each month because you’ll know exactly what the payment will be and the low rates will save you money over the life of the loan.
2. Lower Monthly Payments
As mentioned above, consolidating gets you lower interest rates and that means you’ll pay less in total for your loan. That also means on a monthly basis your payments will be set at a lower amount than those with higher or varying interest rates.
Lower monthly payments will give you more cash in pocket to spend on things you like or need, or give you the opportunity to invest the extra money which will earn you even more.
3. Flexible Repayment Plans
When you consolidate you are combining all your loans into a single loan from one lender. When you do this, the lender will often be willing to work with you to find a repayment schedule that best suits your situation.
A flexible repayment plan may mean extending the life of the loan up to 30 years, which will make monthly payments even more manageable. Keep in mind that when you do this, you will spend more money overall because you’ll be paying the interest longer.
Consolidate Now
Hopefully now you’ll understand the enormous savings you’ll get by consolidating your student loans as soon as possible. The three reasons above are only some of the more meaningful benefits consolidation will offer you. There are other fringe benefits as well that could mean even more savings.
Before consolidating pease be sure to completely research your situation, as all circumstances are different. In some rare cases, consolidation can end up costing more money.
Despite those few occassions when consolidation is not necessary or beneficial, the majority of borrowers should be taking advantage of the opportunity to consolidate student loans.
To learn more about school loans consolidation and get some additional student loan advice don’t forget to visit the School Loans Consolidation Guide.