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Students across the country are jumping
on the government student loan consolidation bandwagon. And for
good reason!
Whether you are still in school, a
graduate, unemployed or comfortably employed you can save thousands
through a government student loan consolidation by locking in
record low interest rates before they go up.
If you need to reduce your monthly
student loan payments by extending the amount of time you have to pay your
debt, a government student loan consolidation may be the solution
for you.
If your loans are in default you may
still reap the benefits of a government student loan consolidation.
Benefits include protecting your credit rating, saving money by locking in
lower interest rates or lower monthly payments.
On the other hand, a government
student loan consolidation may not be the answer for you if you’re
nearing the end of your repayment term. There’s not a lot of ‘cents’
in spending your valuable time rearranging your loan portfolio, especially
if it means extending the amount of time you have to pay off your debt. If
you can manage your existing monthly payments stick with it because you
will save money over the long term.
If you have more than one student loan,
a government student loan consolidation will allow you to combine
all of them into one monthly payment while locking in a low interest rate.
Ultimately, your debts will be easier to manage.
To help make the repayment process
easier and more attractive, there are four government student loan
consolidation plans for you to choose from.
Standard Plan: The standard repayment
plan offers a fixed-rate plan with monthly payments of at least $50 for up
to ten years. Borrowers pay less interest under this plan because the
repayment period is shorter.
Extended Payment Plan: The difference
between this plan and a standard plan is monthly payments are extended
over a period of 12-30 years. If you have a high debt load this may help
you reduce your monthly payments but the longer you take to clear the
loan, the more interests you will pay.
Graduated Payment Plan: Under this plan
monthly payments start out low and increase approximately every two years.
The repayment period can be from 12-30 years depending on your debt load.
Income Contingent Repayment (ICR) Plan:
Your monthly payments via this plan are based on your income, family size
and loan amount.
Take the time to compare the cost of
repaying your unconsolidated student loans against the cost of paying a government
student loan consolidation.
It’s in your best interest to explore
your government student loan consolidation options. Consult https://loanconsolidation.ed.gov
and participating lenders to discover if government student loan
consolidation is the right choice for you. If you decide consolidating
your student loans is in your best interest, taking the time to compare
what participating lenders offer could save you lots of money.
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