If you have been in school for at least two years, you have probably begun to get phone calls and/or see advertisements that offer to consolidate student loans for you. Getting information before making a decision is important, so it’s not a bad idea to look into a few of these offers to see if they could help you reduce your student loan debt or lower your interest rates. There are many good reasons to consolidate student loans now rather than later – Here’s five good reasons consolidating student loans may be a good option for you:
1. Interest rates are much lower now than they were two or three years ago. Chances are you will be able to get a consolidation for a lower interest rate, which means lower payments and lower debt accumulation.
2. Consolidating your loans allows you somewhat of a fresh start. If any of your loans are in default, a consolidation can help your credit and give you an opportunity to get away from high finance charges.
3. When you consolidate student loans you can generally buy time to repay them. The terms for consolidated loans can often be extended or graduated, allowing up to thirty years to repay the loan. Typical student loans must be repaid in ten years or less. Having more time to pay your loan means lower monthly payments.
4. Debt is simply easier to manage when it is located in one place. The average student borrows two loans per term—one subsidized and one unsubsidized. This means that by the end of a four-year degree you have at least twelve student loans, and they may not all be with the same lender. All of these loans individually can be difficult to manage, and a loan consolidation makes tracking your academic debt much easier.
5. There is almost never a bad time to consolidate. You can consolidate student loans as a student, or as a graduate. If you accumulate additional student loans later in your academic career, you can always consolidate again when necessary.