you may need to look into consolidation. This is the option that many, many student loan borrowers choose, and it can definitely be a good option for you. Here’s what consolidation is, what it can do for you, and how you can get your loans consolidated.
Basically, when you consolidate your student loans, you turn them all into one big loan. If you have loans for $ 3,500, $ 4,000, and $ 2,500, you’ll turn them into one big lump loan of $ 10,000. The consolidation is really just one big loan that pays off all your smaller loans. You can stick with the same term on your repayment plan, and you may even lock in a better interest rate with this option.
The main reason many borrowers choose to consolidate their student loans through the government is that it makes repayment easier. Instead of writing three or four checks a month for your student loans, you’ll just write one larger check. Also, if interest rates are on the rise, you can lock in a lower rate when you consolidate. Basically, the interest rates on student loans change from year to year unless you lock it in with a consolidation loan. Sometimes this can help save you a lot of money in the long run, even if it’s only a percentage point’s difference.
To get your loans consolidated, your best option is just to do it through the government. You’ll basically just take out one larger student loan to pay off all the small ones, and the government will write this larger loan, as well. The consolidation process is quick and simple, and you can do it all online.
Keep in mind that you can only consolidate federal student loans this way. If you have private loans, you may be able to take out a Private Student Loans to pay off both your private and your federal loans.
However, you need to make sure that you’re getting a decent interest rate and doable payment terms on this before you sign the paperwork. It’s easy to get roped in by a money shark who is just going to overcharge you for a consolidation loan that’s supposed to make your like a whole lot easier. Just read the paperwork carefully to make sure you know what you’re doing, and you’ll be fine.