Student Loan Consolidation – Pros & Cons & Companies To Use

August 27, 2011

Student Loan Consolidation

Since many loan programs that students apply to give you the freedom to not have to pay monthly payments until you schooling is over, it is easy to forget about the money you owe all together, but when you are a week away from graduating, or already in your career, you have to map out a plan of attack to get your debt paid off.  Student loan consolidation can decrease your monthly payments by hundreds of dollars, depending on how much you owe.

By choosing to consolidate, you will both save money as well as be able to knock out your debt in record time, instead of being stuck with the debt for many years to come. But just like anything else, there great things and not so great things about student loan consolidation, the list of pros and cons will give you enough information for you to be the descision make whether or not consoliation is the way to go for you.

Student Loan Consolidation

Student Loan Consolidation – Pros

  1. One of the best parts, if not the best part of student loan consolidation is that you can group all of your loans programs into one lump payment, instead of worrying about dealing with multiple different programs and paying multiple different payments. This means that if you have any questions pertaining to your payment, the one company you are consolidating with can be your one stop resource.
  2. Student loan consolidation doesn’t require that you consolidate all your loans, you can pick and choose which ones you want to consolidate.
  3. Consolidating will no doubt make your monthly payment a lot cheaper than what you are paying now, and with all consolidation companies, your interest rate will be locked at whatever is choosen for you when your begin.
  4. Student loan consolidation companies are all competing for your business which means that there are plenty of benefits that will be offerd to you like reduction in your interest rates.
  5. The actual act of consolidating will never have a negative effect on your credit score.

Student Loan Consolidation – Cons

  1. Being that your interest rates are locked, if the median interest rates drop in the future, you will be stuck paying a higher interest rate to your student loan consolidation company than what you could of because of the drop.
  2. In the event that you happen do default on your payments, it will be reported to credit card bureaus and will effect your credit score.
  3. By extending your repayment time, your monthly payment will decrease by a lot, BUT, you will end up paying a lot more in the long run, so don’t be fulled by this so called “benefit”.
  4. Switching ot s student loan consolidation program can mean losing the perks and benefits of paying your loan payments to your current lender.
  5. Student loan consolidation programs generally have longer repayment periods which can act either as a pro or a con, being that it can take you longer to pay off the loan. This could be good if you don’t have a lot per month to pay, it can work to your benefit, but if you want to get it paid off fast, it might not be the best choice.

Now that you know both sides of student loan consolidation, you can now make the choice whether you want to make the switch or not. If you choose to do so, there are some incredibel and accredited companies to use. Here are a couple student loan consolidation programs that you can use:

  • Loan Approval Direct is a great company that has been doing student loan consolidation for many years and can slash your current monthly paymet by up to 60 percent, and a possibility to pay an interest rate which as low as 3 percent.
  • Next Student is another great resource to use for you student loan consolidation. This progam can offer you the benefit of getting also paying 60 percent less on your loan payment as well as having lower monthly payments if you have just gotten into your job after your completion of school.

These are two of the greatest resources to use when looking for student loan consolidation programs, that are both accredited as well as providing some of the best benefits around to their clients.

Category: Student Loan Consolidation

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