Tuesday, 13 October 2009

Consolidate Student Loans: - Is It a Good Option?

Many of you might be wondering if consolidated student loan is a good option or not? Well, Student loan consolidation is a great way to reduce the debt especially when you have finished your studies but yet to get into a job. With education getting expensive, most students have no other way than to rely on student loans to take care of their educational expenses. But things get worse when they fail to payoff the debt. The interest rates keep on increasing which makes the matter even worse.

The principal of the loan will not be affected in consolidate student loans, but students can lock in the interest rates to a fixed rate so as to reduce their monthly payments and make it substantially better. In this way, you can reduce your monthly payments by up to 40 percent. In addition to this, you can also stretch out your payment time to decrease your monthly payment amount even further.

Consolidate student loans are similar to housing refinancing loan scheme in many aspects. However, for consolidate loans, during the initial six month grace period; you must start making your payments right away. Otherwise it might be difficult especially in the cases where you are still jobless even after completing your graduation. Although you can wait until just before the grace period ends to consolidate and still receive the lower rates. Only hitch about consolidated loan is that once you have consolidated your student loans, you can’t un-consolidate them again under any circumstances. Hence, it’s recommended to consider your choice carefully before opting foe consolidated student loans.

No comments:

Post a Comment