After the glory days of college are past you, it’s great to finally have a degree in your hand to show for all of your hard work. Unfortunately, you’re probably also going to have a quite a bit of debt that is going to follow you as well, which could be difficult to pay off if you don’t find a job right away. Luckily, one option that you have for your student debt is loan consolidation. This means that you’ll be able to lower your monthly payments and simplify your loans. Here is some insight into consolidating your loans, which could help you decide if this is the assistance that you need.
How Does Consolidating Debt Work?
The idea behind consolidating your loans is that you will take out one, larger loan that will be used to pay off all of the student debts that you currently have. This new loan will typically have a longer repayment term, which could lower your monthly payments. However, it’s also important to keep in mind that since your loan will have a longer repayment term, you could be paying more in interest rates over the term of the loan. This is something that you should certainly look into before you make a final decision as to what you should do with your loan.
What Are The Requirements?
In order to be able to consolidate your loans, there are a few requirements that should be considered. First of all, it’s important to note that you likely won’t be able to consolidate federal loans with private ones, but most federal loans are easy to consolidate on their own. It’s much harder to do with private loans because of fees associated with paying off the balance before it’s term date. You should look into your private loan to determine whether or not this will be an option.
Another requirement is that you cannot still be in school at full-time status. In addition, you may have to have more than $7,500 in loans, depending on the type of loan. Finally, you also should have a good repayment history that demonstrates that you’ll be able to pay back the consolidation loan on time.
What Steps Should Be Taken?
If you want to consider consolidating your student loans, the first thing that you’ll want to do is determine whether or not your loans can be consolidated. In the event that they can, you should then contact a federal loan consolidation program that can help consolidate your federal loans. After that, you’ll want to make sure that you stick to the new repayment plan, in order to avoid further issues in the future.
Debt consolidation can be very beneficial for some people. For those that have payments that are too high or are overwhelmed by bills, consolidation can provide a lot of relief on a monthly basis.
