For a college graduate who is currently unemployed, it is really stressful for him or her to manage multiple student loans that have come due at the same time. To overcome this financial hardship, loan consolidation may be an enticing option. If you need more cash in your pocket right now, consolidating your loans can help to extend the life of your loan repayment and thus trimming your monthly payments.Below are the benefits of student debt consolidation plan. You are advised to go through them carefully to evaluate whether you really need it.
When you have multiple study loans, it is good if you can bundle all your loans together into a single loan under one lending institution. The new lending institution of your choice will pay off all your existing balances to your creditors and a new consolidated loan will be replaced.
This plan gives you a chance to lock in at a lower interest rate, which can help you to save a great deal of money over the life of your loan.
Based on your current financial position, you may not be able to repay your loan with zero or little income. When you consolidate the loans, you may be able to negotiate an extended repayment period (the longest period is up to 30 years) which would decrease your overall monthly payment amount. In general, a consolidation loan may lower your monthly loan payments by as much as 40%. You can definitely make the payment on time by having a part time job.
In the past, you may have missed your payments and your credit rating may be affected. When you consolidate your loans, you are required to make one monthly payment on timely basis. By doing so, you will stand a higher chance to improve your credit score.
If you are currently facing difficulties with your loans, why not you take up this option?