There are a lot of reasons for deciding to get student loans consolidation. The financial situation is not that good all over the country. There are families that are living on a very tight budget. For fresh graduates under this condition, the pressure would become unbearable knowing that there are few job opportunities waiting for them.
It would be an additional problem for those who graduate with the help of federal and private student loans. They are given six months to land on a job. After that, they would have to pay their loans whether they found a good paying job or not.
Financial institutions are aware of this situation so they are offering low student loan consolidation interest rates for new graduates provided they avail of it during the grace period. This is great news for those whose budget is allocated to their basic needs which leaves basically nothing for loan payment.
Student loan consolidation is a must for newly graduates who have not yet found a job but are still in grace period. Aside from low student loan consolidation interest rates they may also opt not to pay their monthly payment until the grace period is over. They would have more time to save for the first payment.
Here are some considerations when applying for student loan consolidation:
The type of loan
There are basically two types of student loans, the federal and the private. Federal loans when consolidated have more advantages than the private. They are regulated by laws and are supported by the government.
The interest rate
Student loan consolidation interest rates are lower and are fixed for the whole duration of the loan. Knowing this would take away any second thoughts on getting the loan. The loan, however, would take a longer time to finish and would mean paying more in the long run that the original loan. Another consideration would be on how to combine loans with different rates. Student loan consolidation interest rates are computed by getting weighted average of the loans being consolidated. If you have two loans of different
Value they would the one with the higher.
The monthly payment
Student loan consolidation has lower monthly payment. This would be a good treat for those who can’t afford to pay the monthly dues. Take note that they offer low monthly payment because they increased the length of payment term. You would end up paying less if the monthly payment is higher but with a shorter payment period.
The length of payment Period
It would take a long time before you will finish paying the whole loan. You may opt to shorten the payment period but the monthly payment would go up.
People who decided to get student loan consolidation are most likely drawn by the low Student loan consolidation interest rates. Other people however reason that they got student loan consolidation because they don’t want to maintain several loans with different due dates. This difficult to manage and has a high risk of forgetting the payment due date.