Deciding If You Want to Consolidate Your Student Loans

loanFor most people who went to college, at some point or another you found yourself in a position where you needed or wanted to take out a student loan. Nowadays it is such an easy thing to do. All you have to do is sign on to the lending website, answer a few questions and wait for your money to arrive. This is also a good idea should you combine it with a payday loan. Check out 24 hour Payday Loans Las Vegas for more.

Sounds like a good thing at the time but when the reality of having to pay back thousands of dollars in debt sinks in, it can be a little frightening. This is when questions about student loan consolidation comes up. There are pros and cons to consolidating your student loans.

Honestly, because of newer interest rate requirements, if you can afford the monthly payment on your loan then it’s more beneficial not to consolidate. Here are some things to consider when thinking about student loan consolidation.

Cannot be consolidated with Private Loans

You will need to take into consideration that your federal student loans cannot be consolidated with your private loans.

Consider Interest Rates

As of the year 2006, consolidated student loans have a fixed interest rate. Before this time they use to have a variable interest rate which meant that student loan consolidation would typically yield a lower interest rate that could be locked in. This is no longer the case. Other than having a single monthly payment, there really is no benefit financially to consolidate your student loans.

Single Monthly Payment

As mentioned above, the good thing about student loan consolidation is having a single monthly payment. This works well if you are not good with keeping track of how you dish out money to different bill collectors.

Alternative Payment Options

Another good thing about student loan consolidation is that it offers a variety of alternative payment options. It is more than likely that you will be able to find a repayment plan that will work for you. These repayment plans also usually lower your monthly payment amount on your student loan.

One of the options is an income-based repayment plan that takes into consideration the amount of money you make. For those recent graduates that are just entering the job market at the lower end of the salary range, this is a great option.

Look at Interest Costs

You will definitely want to take into consideration interest costs when thinking about consolidating your student loan. Although your single monthly payment will be lower, you will probably pay thousands of dollars in interest since the consolidated loan is stretched out over a longer period of time.


Quotes to Reflect On!

There are some incredible money quotes out there! These are a few of them!

High school seniors should receive help in how to think about a student loan and how to make sure that the education bought with the loan offers good prospects for repayment.
– Richard Thaler

And we can see the positive impacts right here at Solyndra. Less than a year ago, we were standing on what was an empty lot. But through the Recovery Act, this company received a loan to expand its operations. This new factory is the result of those loans.
– Barack Obama

No loan is free. The costs are in your loan somewhere, maybe rolled into the amount to be refinanced or even coming at a higher interest rate.
– Barbara Corcoran

After the Versailles treaty, the U.S. could have chosen to become a global economic loan shark, but we didn’t, and let a lot of the tab slide. So not all lending and borrowing is bad.
– Louis Navellier