Education Consolidation Loans

When it comes to dealing with financing your student loans and you’re finally through with graduate and post graduate work, the final tally of what you owe to the loan companies and the government loans is breathtaking.

As we enter college, we know very well that most of us will be paying for it long long after our final graduation, yet we don’t take into account just how much we are going to be paying and for how long. At some point along the way, taking into account all of life’s other expenses, we realize that we’ve been overwhelmed by the debt of our education.

Take a deep breath, step back and then consolidate. By taking all your loan payments, adding them together and consolidating the amount, the new loan will benefit you in several ways.

Multiple loan payments will not be due at multiple times during the course of a month requiring that you memorize more dates and times than you did for history class. Your new loan will afford you a lowered monthly payment than those you had separately. You will have just one lender as opposed to several or many.

Only one interest rate will be part of your loans and if you had several lonas before, chances are that your interest was fairly steep and a large portion of what you paid each month was due to the multiple extensions of credit.

You will have the added benefit of improving, or adding to your credit rating, as the loans which you consolidate are effectively paid off, improving your status and FICO score, and of course, your future.

Many consolidation loans will afford you multiple repayment options. You may take a fixed amount for a period of ten years. This option provides for a larger payment but at the end of the time span the student loans are gone and you are cleared of debt faster. You may pay a smaller amount for a period of up to thirty years, or choose to pay a smaller amount now, and raise the amount every two years. Should you be fresh from medical school, or a higher paying position, and expect that your options and employment will improve your financial situation in a short time, this option is probably the best that you can take.

Lastly, there is an income contingent plan in which your repayment is ascertained dependent upon your current income which is re-evaluated yearly. This option will be excellent for those who do not immediately find employment upon leaving school. You are still making progress with the payment of your loans albeit perhaps only interest, but the loan does not default, and when you are earning more your payments will rise, providing more payment toward the principle aspect of the loan. Whichever option you choose will afford you to at least take a breath and start the act of living rather than holding your breath each time the loan bill comes in.

Once the consolidation is effective, the savings will be immediately apparent to you, with less money leaving your pocket each month to pay the student loans and a bit more staying for the simple things like buying groceries.

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