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Below, you'll find
extensive information on leading student loan consoidation articles and
products to
help you on your way to success.
To Consolidate Or Not To Consolidate
Your Student Loans
By Jeffry Evans
Find it hard to find unbiased
information on student loan
consolidation? Let me help with that. When I graduated from college, I
had somewhere around $12,000 in student loan debt. Seeing how I would
have multiple payments to different lenders, and fearing increasing
rates over time (yes, your rate can vary depending on the loan type and
the lender), I decided to investigate a potential consolidate student
loan. But before I tell you what decision I made, let me give you a few
benefits and problems with student loan consolidation:
Benefits
1. The ability to make a single payment with a single lender, thus
reducing the headache of paying multiple lenders.
2. Most lenders offer a fixed rate
of interest over the life of the loan.
3. Typically, consolidate student
loan companies will offer a lower interest rate than many of your
current student loans.
4. Lenders will usually offer a
longer repayment period, thus allowing for a lower monthly payment.
5. Student loan interest is tax
deductible, thus making a longer repayment period more attractive for
tax purposes.
6. Some lenders will even offer an
interest rate discount for good payers - more on this in a minute.
7. If you are struggling to find a
job, many consolidation lenders will
allow a deferment of forbearance, allowing you more time to acquire
stable income, and may grant a lower interest rate for doing so, due to
the lender accruing interest during the deferment/forbearance period.
Problems
1. Longer repayment periods. Yes, I know I mentioned it as a benefit
above, but it can also be a problem. While longer repayment periods
tend to reduce monthly payments, the overall interest paid over the
life of the loan is more, sometimes much more.
2. Unwillingness to
negotiate. During my repayment period, I called to ask if an agreement
for a principal deduction could be reached or if there was help from
other organizations to pay off the student loan, and absolutely no help
was provided by the lender. I guess the felt I already got a good deal
with an interest rate of 3.5%
3. Default - Do not, I repeat, do
not default on your student loan. Bankruptcy, and any other legal
attempts to welsh on student loan debt won't work - student loans are
like cock roaches, they just will not die. Be sure to pay your student
loan back.
Alright, now that we understand a few of the benefits
and problems, I am going to tell you what I did. I decided to do a
consolidate student loan. I felt there were just too many benefits
involved. The company I went with was Nelnet, and they offered a 15
year loan repayment period with 3.5% interest and a 1% interest rate
discount if I made the first 36 payments on time. What a great deal! As
with all things, be sure to research several different offers before
selecting a consolidate student loan company.
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