Lower Your Payments with Private Student Loan Consolidation
Private student loan consolidation makes it possible to combine all of your private student loan debt into one loan. That means that you could go from having many monthly payments, to just one. Because most private loan consolidation programs allow you to spread out the payback period over 15, 20 or even 30 years, you could lower your monthly payments by hundreds of dollars. This is an especially important feature while you're just starting out in the working world. Student Finance Domain has outlined the most important details for you below.
There are many benefits of seeking out a private education loan consolidation program. First you can substantially lower your monthly payments by extending the length of time you take to pay off your loan. Most private loan consolidation programs allow you to take decades to finish paying your loan. But if you decide to pay it off early, most private lenders won't penalize you.
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Interest rates for private consolidation loans are dictated by the borrower's credit. So if your credit rating has gone up significantly since you first applied for your loans you can secure a much lower interest rate than you currently have. Similarly if you are able to find a cosigner who has excellent credit you'll be better positioned to secure a good interest rate. Either way it will pay greatly to talk to different lenders to compare and contrast the loan terms they give you. Prudent research on this step can save you hundreds or thousands of dollars in interest and fees.
Additionally many private loan consolidation lenders offer special benefits to borrowers such as interest rate reductions when you set up automatic monthly payments through your bank account. They can also offer a variety of repayment options which will vary from lender to lender. A common option is the graduated repayment plan that allows you to pay less now while you make less and then increase your payment amounts gradually over time as you begin to make more money. Additionally many private lenders allow you to defer your loan for a short period after you've consolidated it. This can mean the difference between you setting out on your own or living with Mom and Dad.
In general it's not in a borrower's best interest to consolidate federal loans with private student or alternative student loans. This is because it's difficult to secure a rate lower than the rate you'll get for your federal loans separately. If you find a rate that you just can't pass up and decide to consolidate your federal and private loans together know that the benefits extended to borrowers through the federal government will be at risk. This includes federal deferment and other options.
Private education loan consolidation is a great option to help you early on in your career when you might not be making a huge salary. If your income is forcing you to use your credit card to make ends meet, or to pick one bill over another, you must consolidate your private loans. Carrying student loan debt is almost always better than credit card debt, and the interest you pay is many times tax-deductible. Contact your tax advisor to discuss your personal tax situation and options.
Paying off your school loans is a big endeavor. When you're finished you'll feel a sense of accomplishment and pride. Private student loan consolidation can help you reach your goals faster and easier.