Do you find it difficult to raise the money that can compensate your expenses as a college student? Perhaps your parents receive only a meager salary and such would not even suffice for your daily provisions. You might have already decided to take a part-time job but still, your wage is not that big to cover your tuition fee and other payments incurred for your board and lodging, books, materials, uniforms, and the likes.
In this way do the variants of student loans come to the rescue. But the very notion that most people have is that loans may be hard to repay especially that it is a given fact that they come along with very high interest charges. So if this is your thought on the matter, might as well ponder on direct student loan consolidation.
Direct Student Loan Consolidation Explained
In its real sense, direct student loan consolidation is all about compacting your existing loans into one so that you don’t have to worry about the ballooning interest rates. The payment for multiple loans can be a real pain in the neck.
However, rolling them all into one can reduce your worries and henceforth pave the way for a more manageable money handling. By means of directly consolidating the loan, you come up with a new set of loan to repay and thus the rest of your previous loans would be credited as paid in your credit history. The good side of it is that you are able to increase your credit score.
Direct Student Loan Consolidation Repayment Schemes to Look Into
Before plunging into the decision of securing a direct student loan consolidation, it is best to first get to know the repayment schemes which are available. There are generally four classifications of the repayment method. Going over them would mean a lot especially in your attempt to gauge which plan would work to your best interest.
The standard repayment plan. This scheme permits you to have fixed monthly repayment dues that can last until ten years depending on the loaned amount.
The extended repayment plan. This plan is good for up to thirty years but it necessarily makes it clear that you are going to be burdened by the paying off worries for a long time. Also, the interest rates can likewise be more than what you originally owed the lender.
The graduated repayment plan. This has a span of between twelve until thirty years. The difference lies in the fact that your monthly dues are going to escalate in every two years’ time.
The income contingent repayment plan. If you have landed on a job, then you can definitely opt for this payment scheme. The monthly dues are going to be assigned based on the annual gross income that you receive. Basically, you would have to cover the repayment period for up to twenty five years.
Generally, the direct student loan consolidation option is only beneficial for those debts that you have just started paying off. If you are nearly towards the finish line, then it is not an advisable thing to settle with.