Student Loan Consolidation: One Step Towards Ease
Federal student loan consolidation has become one of the leading solutions to student loan debt. With most graduates leaving college with over $20,000 in debt, consolidation is increasingly an option to treat payments. The government has taken this debt earnestly by suggesting several programs with consolidation as a one, to help youthful adults afford the payments.
It can be a financially raunchy road injecting the job force after graduation even without hefty student loan debt. Many graduates are choosing to stir back in with their parents in order to keep costs low while embarking their careers. Some graduates are choosing to defer their loan payments, pushing them back until they have a chance to get on their feet. This option will help those who are able to begin their careers quickly, but for those who are not so fortunate or determine to switch their life goals, these loans will only increase sitting in deferment. The sooner payments are made the better.
Student loan consolidation programs will bring long term debt ease. Bouncing numerous bills and due dates on its own is a challenge. Those who are fresh to budgeting for cost of living requests will appreciate the simpleness of consolidating student loans for both Federal and private loans. These two types of loans are typically not consolidated together. Even if you consolidate them each on their own, having two smaller monthly payments will be much lighter to treat.
*Group your Federal loans together into one payment. The smaller monthly cost(s) will help keep a budget strong.
*Consolidation will help loans in default get back on track while putting a stop to tax offset. Federal loans in default can and will get paid even if it is from taking some or all of your tax comeback.
*You may be able to get a better interest rate than the initial loan. Lowering your interest rate will help decrease the long-term final cost of your student debt.
Once you determine to take the step to consolidate your Federal loans, you will want to make sure you do not qualify for any other type of ease. There are forgiveness and income-based programs which may bring extra help prior to consolidating the loans. The forgiveness program will lower debt amounts which can then be consolidated, but income-based programs are separate. Debtors will want to know which program works best for their own private situation. It can be fairly a complicated process so finding a service that works with the Department of Education may promote the best results.
The income-based programs will help with those with lower paying jobs, like public service workers. Monthly payments are capped according to the debtor’s salary. The payment is based on a certain percentage of income. If there is an increase in salary, then the monthly payment will go up as well. After 25 years of payments, if the loan is not paid off, then the remaining balance is forgiven. One down side to this program is that if a person has already been paying on the loan, these payments will not count as time towards the 25 years. Once you qualify for the program, the clock will be set back to zero.
Don’t leap at the very first chance to get help with student loan consolidation programs; take your time and research your money options.