If there is one issue that is plaguing new grads and students, it’s the issue of student loans. Too many minimum payments from the loans you have taken out can eat away at your budget, and can make it difficult for you to move forward in your life. By combining your student loans into one larger loan, you can reduce and simplify the payments you have to make. Believe it or not, thousands of recent grads have gained financial freedom and reduced stress through student loan consolidation.
How It Works
Student loan consolidation works much like many other debt consolidation programs in the sense that it combines a bunch of your smaller loans into a larger one. This larger loan generally will have lower monthly payments, lower interest rates, and a fixed term. This means that you will have to pay less money through the month, and that you also may be able to avoid heavy interest fees.
However, there are some big differences between regular debt consolidation and student loan consolidation that you should be aware of. Here are the biggest differences you need to be aware of…
- If you choose to do private refinancing-style student loan consolidation, you often can simplify both private and federal loan payments. This can allow you to get a lower interest rate, and can help you become more credity-worthy. Once you refinance your federal student loans through private means, you cannot qualify for the William D. Ford Federal Direct Lending Program.
- You may have to qualify in order to consolidate certain student loans, especially federal loans. Credit checks, income, and similar factors may apply. Go to our FAQ section to find out more about student loan consolidation qualifications.
- There are federally-backed programs that allow you to reduce payments and get student loans consolidated. These kinds of consolidations are done through the The William D. Ford Federal Direct Lending Program. This program is notoriously easy to qualify for, offers lower payments, payment flexibility, and in certain cases, loan forgiveness.
Why You’ll Love It
- Students that are drowning in debt need not ask about why so many people are happy to refinance or consolidate their loans. It’s a big deal. Here’s more about the benefits that student loan consolidation can offer you.
- Assuming that you pay your consolidated loan on time, you can expect your credit score to rise. Your credit score is crucial to your ability to be able to live a normal adult life. By making the right financial decisions for yourself and paying off your consolidated loans on time, you’re improving your credit score.
- Most of the time, student loan consolidation will result in savings. This can mean lower interest rates, and lower monthly payments!
- If you choose to go through federal student loan consolidation programs, you may be able to get your student loans forgiven. If you have performed a public service, you likely might be able to qualify for student loan forgiveness. Nothing’s better than seeing your loan burden vanish in an instant, right?
- You also may be able to get more payment flexibility. For some struggling grads, this can make all the difference between living comfortably and living paycheck to paycheck.
- In certain situations, student loan consolidation can also help prevent bankruptcy or serious poverty. Student loans are not extinguishable via bankruptcy, which means that you will have to pay them off. The good news is that in many cases, student loan consolidation programs may be able to help you afford payments without incurring financial stressors.
Get Your Student Loans Consolidated
The student loan bubble is one of the worst crises to happen to the US in recent years. If you feel like your loan payments are making you spiral out of control, Finance Fitness GYM can lend you a helping hand.
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