Introduction
Having to pay for your student loans after graduating can be a real hassle, furthermore, it is not guaranteed that you will get a job immediately since the economy is very shaky. Higher education has become very expensive and most students have to take more than one loan to meet all these costs. If you are caught up in student loan debt, it is wise for you to consider private consolidation student loan. This option allows you to merge your debts into one single loan.
Step 1
The major advantage of consolidating student loans is the fact that it increases the duration in which you are supposed to pay the loans. There are two ways of consolidating loans, private consolidation student loan or federal consolidation. Meeting the criteria for federal consolidation might be hard; since competition is also very high and that is why private consolidation student loan is an easier option.
Step 2
The option of private consolidation student loan is more expensive than the federal one but if you take the time to search, you are likely to get a provider with a fair rate. What are the advantages of private consolidation student loan?
• Flexible repayment plan
• Longer duration to repay loans
• Lower monthly payments
• Lower interest rates
Step 3
It is advisable to consolidate your loans immediately after graduating or during the grace period. At this time, it is easier to get low interest rates. Waiting until your debts pile up will attract higher rates from consolidation companies. Bundling up all your loans into one repayment plan also helps you to plan for them and allocate monthly payments from your budget.
Step 4
Private consolidation student loan providers either offer a fixed or variable rate of interest. There are advantages and disadvantages of both, it is wise to read through the terms and conditions before you settle on any one rate. If you are insecure about your income, it is safe to go for a fixed rate where you can plan for your payments well in advance. Remember that defaulting on your payments will lead to a higher interest a rate.
Step 5
To help ease the burden of payment, you should consider having a consigner with an above average credit score. Private lenders will consider your credit scores before advancing loans to you and that is why it is wise to have a consigner so that you can negotiate for better rates.
Tips
There are various repayment plans available for private consolidation student loans. Depending on your budget, you get to choose which plan is ideal for you. You can even extend the period to about 20 years. Stretching your payments for very long could mean that you end up paying higher amounts, it thus advisable to go for a plan that will benefit you more. Shopping around is very important, take advantage of comparison tools on the website and check out quotes from various lenders. Also ensure that you go for a reputable provider who has been in this business for a reasonable period of time.
Sources and Citations
www.studentloanconsolidator.com/private/
