Currently, student loan debt in the U.S. is more than one trillion dollars. In fact, $26,000 or more is the average amount of student loan debt carried by college graduates. As many as 37,000,000 Americans owe student loans and many of them are worried about that unpaid debt. Many of those students and graduates are interested in student loan consolidation for the purpose of lowering their monthly payments.
Some of the possible benefits of student loan consolidation, whether you’re paying sallie mae student loans, great lakes student loans, private student loans, or some other type of student loans, are as follows:
- Saving as much as 60 percent on student loan payments monthly
- Qualifying for loan forgiveness on student loans
- Benefiting from government programs
- Qualifying for monthly payments that are based on income
- Possibility of consolidation of multiple student loans
- Switching a variable interest rate loan for a fixed interest rate
- Alternative repayment plan access
- Getting as much as 30 years to repay
It’s important to give careful consideration to what would be the best consolidation for you. These tips can help you decide if student loan consolidation is even a viable option:
1) The majority of federal student loans will qualify for student loan consolidation, but private student loans don’t.
2) Increased repayment period could mean paying more interest, as well as more payments.
3) You could lose whatever borrower’s benefits you had on the original student loans. These could include certain loan cancellation benefits, principal rebates, or interest rate discounts, which could result in a significant reduction of the repayment cost.
4) Once you consolidate, the original loans don’t exist any longer since they are paid off, so the process cannot be reversed.
5) Student loan consolidation is an excellent option for individuals with low income and multiple loans.
6) Some student loan consolidation companies could make big promises, but fail to disclose all of the terms. Beware of marketing ploys and empty promises.
So, if you are considering student loan consolidation, weigh all of your options carefully and enlist plenty of sage advice about the subject. Don’t just look at the prospect of lower payments, but at the long-term ramifications as well. For more information, you can go to studentloans.gov.