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Goverment Student Loan Consolidation:
Is It The Solution For You?
Students across the country are jumping on the goverment student loan
consolidation bandwagon. And for good reason!
Whether you are still in school, a graduate, unemployed or comfortably
employed you can save thousands through a goverment student loan
consolidation by locking in record low interest rates before they go
up.
If you need to reduce your monthly student loan payments by extending
the amount of time you have to pay your debt, a goverment student loan
consolidation may be the solution for you. If your loans are in default you may still reap the benefits of a
goverment student loan consolidation. Benefits include protecting your
credit rating, saving money by locking in lower interest rates or
lower monthly payments.
On the other hand, a goverment student loan consolidation may not be
the answer for you if you’re nearing the end of your repayment term.
There’s not a lot of ‘cents’ in spending your valuable time
rearranging your loan portfolio, especially if it means extending the
amount of time you have to pay off your debt. If you can manage your
existing monthly payments stick with it because you will save money
over the long term.
If you have more than one student loan, a goverment student loan
consolidation will allow you to combine all of them into one monthly
payment while locking in a low interest rate. Ultimately, your debts
will be easier to manage.
To help make the repayment process easier and more attractive, there
are four goverment student loan consolidation plans for you to choose
from.
Standard Plan: The standard repayment plan offers a fixed-rate plan
with monthly payments of at least $50 for up to ten years. Borrowers
pay less interest under this plan because the repayment period is
shorter.
Extended Payment Plan: The difference between this plan and a standard
plan is monthly payments are extended over a period of 12-30 years. If
you have a high debt load this may help you reduce your monthly
payments but the longer you take to clear the loan, the more interests
you will pay.
Graduated Payment Plan: Under this plan monthly payments start out low
and increase aproximately every two years. The repayment period can be from
12-30 years depending on your debt load.
Income Contingent Repayment (ICR) Plan: Your monthly payments via this
plan are based on your income, family size and loan amount.
Take the time to compare the cost of repaying your unconsolidated
student loans against the cost of paying a goverment student loan
consolidation.
It’s in your best interest to explore your government student loan
consolidation options. Consult https://loanconsolidation.ed.gov and
participating lenders to discover if goverment student loan consolidation
is the right choice for you. If you decide consolidating your student loans
is in your best interest, taking the time to compare what participating
lenders offer could save you lots of money.
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