Although more and more students are staying at home for the first couple of years of college, many still take the traditional route and go off to school. It doesn't take too many semesters to rack up several thousands of dollars in student loan debt. Students who went to a private college, or those who went on to get an advanced or specialty degree, typically have even more debt. If you fall into any of these categories, you funded your education with student loans.
The higher your expenses, the more likely it is you took out multiple loans. You might want to think about lumping all that debt together and looking into private student loan consolidation.
If your loans were federal, you should probably opt for federal consolidation. But, if they were private loans, private consolidation is the way to go.
Private and federal loans are different in that the former are funded by banks or other lenders, and the latter are funded by the federal government. You'll want to explore private loans with both variable and fixed interest rates. Obviously, the fixed interest rate loans may provide more stability, but they may have a higher interest rate, as well.
One big advantage is that student loans consolidation can most likely lower the amount of money you're paying out each month. The ability to save money each month on student loans offers a huge benefit to graduates who carry a lot of debt. Most recent graduates are just trying to keep their head above water, paying their monthly bills. Some also hope to start building up a balance in their savings account. High payments put a serious damper on that goal.
Another consolidation advantage is the potential to simplify your financial life. Making payments to a number of banks each month, each on a different day and for a different amount, can be a bear to manage.
3 Tips For Private Student Loan Consolidation
If you are considering private student loan consolidation, here are 3 ways to help make sure you get the best deal.
Shop Around To Get The Best Bank Rate
You'd be surprised how much money even one point off an interest rate can save you. Spending some time on the front end, shopping around for the best rate, is in your best interest in the long run. It is always worth it to spend a little more time now shopping around with multiple lenders, looking for the best rate.
Evaluate Each Potential Lender As A Company
Do research on the lenders to ensure they're reputable and that they are a company you're comfortable doing business with. Be sure to ask whether they allow for online application, whether their repayment plans easy to understand, and whether they offer any benefits to borrowers who pay their monthly bill on time.
Be sure to take notes on your conversation with each lender so you can compare them side by side. Don't rely just on your memory. Some of these details can be confusing.
Negotiate The Terms You Want
Before agreeing to anything with a lender, ensure you've already figured out what payment terms will meet your needs. The longer the period of the loan is, the lower the payment will be each month. But, don't forget this means you'll be paying more money in the long run. As a good rule of thumb, you should get the shortest term possible with a monthly payment you can afford now.
The benefits of student loans consolidation are significant, but it takes a bit of homework. Utilize these tips to make sure you get the best deal.
No comments:
Post a Comment