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Sunday, February 1, 2009

Consolidate Student Loans - Repayment Plans

By Norman Harris

Consolidate student loans as early as possible. This will help you get your finances in order and avoid the confusion that comes with multiple student loans. The last thing you want is a bunch of paperwork from different lending institutions.

Keep things simple for consolidating your student loans to one account. To get your loans paid off fast all depends on how much you owe and the repayment plan you choose for the term of the loan.

Generally, consolidation loan providers will give you access to several alternate repayment plans apart from the standard ten-year repayment plan that most people go with. These alternatives include extended repayment, graduate repayment, income contingent repayment, and income sensitive repayment.

Some of these options depend on the type of loan you are dealing with, so you may not be able to get all of the possible alternatives. Normally if you do not specify the precise repayment terms of a student loan that has been consolidated, you will then receive the standard ten-year repayment plan.

When you do decide to consolidate student loans, this will reduce the amount you pay for the monthly payments. This however can extend the term of the loan. Federal loans in general offer and extension to the 10 year repayment plan. It all depend what you owe on the loans and you can extend the term of the loan up to 30 years.

Having a lower monthly payment on your student loans is easier on the wallet at first but in reality you end up paying more in the long run do to interest payments.

It is generally advisable to go with the standard ten-year plan when you consolidate student loans. You can usually save some money this way. The alternate repayment plans call for lower monthly payments, but you will end up shelling out a lot of cash on interest for a longer stretch of time if you are not careful.

Be sure to do the research on consolidating your student loans and also check on the ten year plan. Do this, and everything will work out.

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