What is Student Loan Debt Consolidation?

Student loan debt consolidation is just like any other form of consolidation whereby a borrower negotiates one big loan with a lending company to pay off all his or her other debts.

If you have several student loans that you have to pay, debt consolidation actually offers the following benefits:

(a) Lower interest rates

(b) Locked-in interest rates

(c) Only one monthly payment

Student Debt Consolidation: It's Not All Rosy

While consolidation offers the simple solution of "merging" all your debts into one, in most cases, it involves swapping all your unsecured obligations with a secured loan.

Secured loans are different from their unsecured counterparts in that the borrower's asset (like a house) is often used as collateral. That is the reason why consolidation packages have lower interest rates. In case you default, the lender can always foreclose your property. Also, since consolidations have longer payment terms, you end up paying more.

Federal Student Loans

If you're planning to take out a loan you can keep your debts to a more manageable level by applying for, at the onset, federal loans like Stafford student loans. Since they are subsidized by the federal government, disbursing lenders charge lowers interest rates for them.

If you have several types of student loans to pay, you will need to consider consolidating your debt if repaying them is becoming unmanageable. Keep in mind that federal student loans cannot be mixed with private loans in debt consolidation. You will need to apply for a separate student debt consolidation plan for federal loans and another for private loans.
After all is said and done, education loans are probably most important debts in the world. But their importance doesn't really spare you from the cost of paying for them right after graduation. So, weigh your options carefully and while you're at it, check out how you can land a high-paying job.

Visit the website http://www.studentdebtconsolidationloans.net/ for more information on student debt consolidation

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