Because of the financial crisis that is happening globally, many students are having difficulties in making their payment for their student loans. Luckily, these students don’t have to file for bankruptcy just so they can find a way out of this difficult financial situation. One way out of this dreaded situation is through direct consolidation loan.
Direct consolidation loan is a type of student loan which allows student loaners to combine all their existing education loans into a single new loan. Its primary aim is to assist students in paying their education fee after graduating in school. A good thing about this type of loan is that it has many benefits. One of which is its flexible repayment options. These options are designed especially so as to enable the students to meet not only there different daily needs but also their financial debts.
Through this flexible repayment schemes, student loaners can switch their repayment plan at anytime they want. These repayment options are that of a contingent repayment, extended repayment, graduated repayment, income based repayment, standard repayment and so on. Having a flexible repayment option is a very helpful thing as it allows students to make larger than the usual payments without having to pay for any penalty due to overpayment.
Another benefit that direct consolidation loan imparts to its loaners is that of a one lender and one monthly repayment bill scheme. This is considered as an advantage since it enables the students to have a simpler repayment terms as he or she will only have to pay one specific lender. This is made possible since all the student’s loans are combined into one lumped account addressed to one lender which is usually the United States Department of Education.
Yet another one of its benefit can be seen through its lower monthly repayments. Direct consolidation loan can offer lower monthly repayments since all of one’s debts are being repaid at once, therefore only leaving one single new debt that has an extended period of repayment. Usually, by consolidating your loan, the monthly service charges of your multiply loan is reduced to just one. However, in order to have these lower monthly repayments, you have to check as to whether or not your new loan will make gain or lose more money. Usually, having a smaller rate of interest is a good sign. Then again, you must consult an expert first before you engage in this type of loan so as to be really sure that you will have a positive gain.
Direct consolidation loan is open to practically any student that can show a credit record that is necessary to qualify for a consolidation loan. It is also open to any student that has collateral back. Usually, the secured loans have a somewhat lower rate of interest than that of an unsecured one. Then again, you can still be assured that this type of consolidation loan is affordable and reliable as it is more often than not being backed up by the government.