College students are offered for different loans during school each year. So when it is about graduation time, a student has many individual loans. As a student, consolidate my student loan into a single new one might be a wise decision. But this is not always a smart move to consolidate my student loan. Everyone should consider some facts before consolidating their student loan.
What is Consolidating Student Loan?
When a student has more than one student loans and wants to simplify his/her payments, then the total procedure is called consolidating student loan. The way to consolidate my student loan is better through Federal Direct Consolidation Loan. With this Federal Direct Consolidation Loan process, I will get a new loan with the same amount of your old loans. It will have a fixed interest based on the average of the loans I consolidate.
Should I Consolidate My Student Loan?
should I consolidate my student loan? Many of us may have confusions about this fact. As it is mentioned before that, before consolidating student loan, one has to consider keeping some things and then decide. There are differences between consolidating and refinancing student loan. Let me give you some ideas. When you refinance, you can consolidate different loans into one.
- I should consolidate my student loan when I am struggling to make your payments. Consolidation can help reduce my monthly payments. I can extend my repayment term to up to 30 years and get a smaller payment.
- I should consolidate my student loan when I have older federal loans. It may be with some interests. Then the interest and monthly payment change with market conditions. So, consolidating might help, if I want the stability of a fixed-rate loan with steady payments.
- Consolidation does not always make debt less expensive by lowering interest rate.
- If there remain Parent PLUS loans for a child and individual loans that have been taken out for one’s own education, then that individual shouldn’t consolidate student loans.
- When someone has been in an income-based repayment for five years and decides to stay on that for twenty years, then one should not consolidate student loans.
- Those companies who charge you with fees to consolidate your loan, you should not go for that.
- If I want to simplify my payments then I should go for the consolidating of student loan and if I want to save money then I should look for the refinancing.
“Should I consolidate my student loan?” -is a matter for many students who are in confusion. One should have the ideas of the facts before consolidating his/her student loan.