The mountain of student loan debt that most graduates carry nowadays can be eased with the help of expert student loan consolidation services. Going by the term, consolidation simply means combining various loans into one so that you need to pay only one loan at a weighted average of the existing interest rates. However, the benefits of loan consolidation are far more than this, especially if you have taken only federal student loans.
It is not uncommon to find graduates with even 10 student loans, each of them with different interest rates, terms, various due dates and different monthly payments. Thus, it can be difficult for graduates who are now professionals or looking for a job to pay off all their loans. This is a needless hassle that they can live without. This is where they need the services of an expert for student loan consolidation. However, before you consult with an expert, you need to keep the following factors in mind:
The student debt you owe
Other than knowing the total loan balance, borrowers also need to know the different interest rates and whether those are fixed or floating. A weighted average of all the student loans being consolidated is calculated and the combined interest is to be charged on all of your student loans. An expert student loan consolidation company can clearly explain how this is calculated and how you benefit from it.
You need to keep in mind that federal student loan consolidation programs offered by the government don’t allow the consolidation of private student loans.
Evaluate the loan benefits
Usually, federal student loan consolidation plans come with a forgiveness option. So, you need to find a loan repayment plan that offers forgiveness benefits. For example, consolidation through repayment options such as the Income Based Repayment (IBR) Plan or the recently amended ‘Pay as you Earn’ plan offers such benefits. An expert for student loan consolidation can help you ensure that you get all the benefits of loan consolidation.
Think about the long term benefits
Various federal student loan consolidation programs help you lower your current monthly payments. This is done by extending the loan period from the standard of 10 years to 25 years. Although this results in a higher overall payment, you will gain significantly. If the value of the dollar depreciates over time, and your income goes up at the same time, it will be useful for you to reduce your current monthly payments.
Consult a student debt relief firm to know more about various student loan consolidation options and their benefits.