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Tuesday, February 24, 2009

Consolidating Your Student Loans is a Wise Choice

By Mary Wise

Over the years, you might have incurred lots of student loans with various lenders. Chances are you make multiple payments each month to many different loan services. Perhaps you did not know that you can save tons of money by consolidating all of your student loan debts into one.

Are You Buried In Student Loan Debt?

The cost of attending college has skyrocketed over the years. Being a student is a very expensive occupation! Many students find that after they have worked so hard to obtain their degree they come out of college with not only a degree but a mountain of debt with huge payments looming within the next six months. This can put a strain on your finances as you try to find a job. Or perhaps your student loan payments have already begun to get out of hand and you feel like you will never get them caught up. If so, now is the time for you to consolidate your student loans.

Consolidating your student loans means that you will take every loan that you are paying for and bundle it together to be paid by a new lender. In most instances, you can negotiate a consolidation loan for all of your student loans to get more favorable terms than you are currently carrying with the bulk of your student loans.

Lower Your Total Monthly Payments

One of the major advantages of consolidating your student loan debt is that you can lower your monthly payments. Whereas you might be paying a combined payment of $500 for multiple student loans, when renegotiating your student loan debt, you might make one payment for $250 or less to your new lender. This is just an example of how consolidation can benefit you - your payment will be based not only on how much you owe, but also on how much you can afford to reasonably pay each month according to your income and other obligations that you might have outstanding.

Pay Less Interest - Keep More Money In Your Pocket

An additional advantage of consolidating student loan debt is that consolidation allows you to pay less interest, which can literally mean thousands of dollars in savings over the life of your repayment schedule. While most of your current student loans have differing rates of interest attached to them, your new loan will have an interest rate that is less than or comparable to the loan that you are now paying the least amount of interest on.

Further, consolidation provides a great opportunity for you to rid yourself of any variable rate interest loans that you might have (which means you pay fluctuating amounts of interest on the principle) and lock in a new, fixed rate that will feature a predictable payment amount - again, saving you a bundle of cash in the way of interest.

You can find the best consolidation loan packages for student loans on the Internet. Online lenders often have the lowest interest rates across the board when consolidating your student loans.

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