As you are graduating from college you must be wondering what you should be doing with all your student loans. Besides planning to repay the loans, this is the perfect time to start thinking about consolidating your student loans.
There are many private companies across the US that help student or newly graduated people to consolidate their loans at a lower interest rate. However, there are many companies that will promote themselves by saying that you can save money and pay off your loan in shorter period of time. Unfortunately, this is not always true because sometimes students do not save money and payments end up taking longer than expected.
Many students think that if they extend their current student loans they will save and receive the same benefits as consolidating. However, this is not true. An extension of loans means you will increase the overall amount of interest you pay, while consolidating a loan could reduce the amount.
Student loan consolidation means that you end up having lower monthly payments. In addition, you will get many more benefits. Discounts are usually offered if a person has a balance exceeding $10,000 and lenders end up giving a small percent discount if a person makes a certain amount of consecutive payments.
In order to qualify for student loan consolidation, you should have outstanding debts of $75,000 or more. A point to remember is that if you have bad credit, the chances of you getting approval for student loan consolidation will decrease. That is why it is important to improve your credit report before you apply for a student loan consolidation.
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