Student Loan Consolidation

Having attended college at the age of forty, it was apparent that I needed to avail myself of a student loan. Applying for Sallie Mae and Stafford loans to afford me the opportunity to complete my degree was not only important, but allowed me to do so without paying high interest rates on the loans. However, after graduation, having to pay two loans over the next ten years seemed daunting. This is where student loan consolidation became my saving grace.

A student loan consolidation gives you the ability to refinance multiple education loans into one new loan and offers a new repayment term, monthly payments, and low interest rates. In addition, consolidation loans are readily available from student loan lenders and loan holders, including Sallie Mae. When your consolidation loan is issued, your lender pays off the outstanding balances of the loans you put in the consolidation.

In addition to simplifying record-keeping and check-writing chores, consolidating the loans can reduce your monthly payment by up to 53%. That's because consolidation lets you stretch your repayment period from the standard 10 years to up to 30 years, depending on the amount of your education debt. Student loan consolidation lets you convert variable-rate education loans into a loan with a fixed interest rate. Moreover, extending the repayment period increases your total interest payments so that you will make smaller payments over a longer period of time. In fact, there are no penalties for increasing the payback of your consolidated loan.

Why should you consider student loan consolidation? If you have loans with different lenders, consolidation centralizes payments; the interest rates are fixed; you are afforded a grace period; allows you to free up additional money by reducing your monthly payment; use the savings to pay up credit card debt; have money available in case of an emergency; and gives you piece of mind by ensuring you pay one rate at a low interest which never changes over the course of the loan.

Further, by taking advantage of student loan consolidation, you can use the deferment options in case of the following: if you are in-school full time or half time; if you are seeking a graduate fellowship; are currently in rehabilitation training; become unemployed; or suffering from economic hardship. Note, however, that you are responsible for paying your education debt even when granted deferment. Deferment is temporary and limited to specified time frames. The interest rate charged on a consolidation loan during deferment is the same as the interest rate charged during repayment

Think about student loan consolidation as another vehicle to help you not only pay off your loans, but allow you to save money as well. This will become an invaluable resource after you graduate or continue on further your education.