Student Loan Consolidation Programs


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Keeping in mind that the cost of college education is much higher than it used to be, by the time you graduate from high school you already need to consider applying for one or several student loans. Fortunately, taking up several student loans is not complicated as there is a student loan consolidation program available to you that will roll all your existing loans into a single one.
The federal government, in its efforts to provide accessible and affordable education for all, has set low and fixed interest rates on all federal student loans and is also offering a student loan consolidation program with flexible repayment schedule and reduced interest rates. All the advantages of loan consolidation are available to you: you make a single payment every month instead of the several payments you initially had, the amount of money you pay is lower than the sum of amounts you had on your previous loans and there is only one lender that you make the payment to. Also, applying for a student loan consolidation program is an easy process that does not involve any credit checks and does not require you to pay any additional fees or charges.
Advantages and disadvantages of a student loan consolidation program
With the student loan consolidation program you get all the advantages that come with rolling several different loans into one. The interest rate is lower than the average of your previous interest rates, which means you can actually save money while you are repaying the loan, and it is not subject to change for the duration of your repayment schedule. The repayment plan is flexible, you can extend the period you need to pay back the loan, or you can choose to pay the entire sum earlier with no additional prepayment penalties. There is also the option of making the payments online which decreases the rate of interest by 0.25% and also keeps you constantly up to date with the details of your repayment status.
There are, however, a few disadvantages. For instance, before applying for a student loan consolidation program you need to do the math of your existing loans properly. If some of your loans have extremely low rates of interest it is not advisable to consolidate them because after they are averaged with the interest rates of your other loans the rate will increase and you will end up paying more money. In this situation it is better to pay your low interest loans separately and only consolidate your other student loans. Also, always keep in mind the repayment schedule flexibility offered by the student loan consolidation program.
You can stretch the payments to a period of 30 years, but it is advisable that you prepay the loan if such an opportunity arises. This will save you the interest added in time, therefore meaning that the amount you prepay is much lower than the overall sum you would pay in 30 years. The student loan consolidation program is an effective tool in simplifying your repayment schedules and lowering your interest rates.


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