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Monday, March 2, 2009

Managing Your Student Loans Through Consolidation

By Darren Cason

Paying interest on several student loans every month, worrying about the upcoming payback on those loans, or seeing that your credit is lower now that you have all those loans on it from school is not a fun thing. It's something that many people, fresh out of college, have to worry about, though. Thankfully, there is a solution in student loan consolidation. This solution has many benefits.

One of these benefits is usually lower monthly payments, since you only pay fees to one institution and since it's usually at a lower interest rate and a better payment schedule. Student loans (and consolidations) are regulated and guaranteed by the government, so they have specific interest rates they must offer and specific payback schedules to use. When you apply for student loan consolidation, they usually consider your credit score without the interference of the current student loans, which means your score will be higher and get you a better rate too.

Other benefits can include electronic or automatic payment deductions from your checking or savings accounts, so you won't forget a payment and you'll usually qualify for a discount on your interest rate too.

In addition, if you haven't yet made a payment on your loans because you're still in your deferment (or grace) period on them, you can probably qualify for better student loan consolidation options than otherwise available. These can include better rates, easier processing of the loan, or even an increase in grace period before your first payment is due.

Often, the loans you received while you were in school are at higher interest rates than you'd get otherwise because the financial institution wanted to get the higher rate and you or your admissions counselor just wanted to get the tuition paid for. Now that you're looking at those payments, you're probably regretting those decisions, most especially if you are experiencing a poor credit situation. But there is hope and usually consolidation loans have lower interest rates than what you were given when you applied for the loans to start with.

Because of the government involvement in the rules and regulations of student loans, you could qualify for more options like lower rates, discounts, or even payoffs from grants and more.

So look at what you can gain by getting a student loan consolidation and reducing your payments, interest rates, and more, so you can focus on your new life now that college is over. Student loan consolidations are a quick way to get peace of mind, allowing you to focus on the new life ahead of you.

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