Have you just graduated from college? Congratulations! You have finished a great achievement and now it’s time for you to prepare yourself for the opportunities and challenges that await you in the corporate world. But before you get too overwhelmed with other things, see to it that you do not forget your obligation to pay back your student loans for college.
Student Loans for College and Student Loan Debt Consolidation
The US Department of Education reveals that more than two-thirds of college students graduate with an average student loan debt of $19,200. Most students have obtained multiple student loans from different sources so repayment can become a very challenging task.
If you are managing multiple student loans from different lenders, you may consider student loan debt consolidation. By consolidating or combining your student loans into a single loan, you can reduce your monthly payments, enjoy a lower interest rate, and eliminate the confusion of juggling payments from one lender to another.
Nonetheless, those who decide to take student loan debt consolidation must be very careful in choosing a consolidation loan company. Take note that some predatory lenders do impose unreasonable conditions, high interest rates and hidden charges. Furthermore, consider the length of the repayment period. While a long repayment period may greatly reduce your monthly obligation, in the long run, you end up paying more because of the additional interest charges.
Before consolidating, find a realistic repayment term that you will be able to stay on for a long time. Spend time comparing different debt consolidation companies. Also, if you have acquired Federal Student Loans and Private Loans, it is recommended to keep these two loans separately, instead of consolidating all into one account. The reason is that some lenders may off consolidation of both federal and private loans, yet charge high rates with no repayment discounts. Also, Federal student loans already have low rates so they should not be merged with private student loans.
Submit Your Student Loan Payments On Time
Student loans must be paid on time from the start until the end of the loan term. Doing so enables the borrower to save a significant amount of money by not paying penalty fees. It also enables a fresh grad to maintain good credit history and credit score, which is very important to have now more than ever. Lastly, it allows the borrower to finish repayment at a sooner time, save money on interest rates and be free from student loan obligations.
It is a good idea to arrange automatic payment system with your bank to sure that you will not miss a single due date. Electronic payments can also save you about 42 cents on stamp each month and you may be able to enjoy a 0.25% off of your interest rate or more, depending on the lending company.
Try to pay more than the required monthly payment as much as possible. Even adding $10 to $20 on your monthly loan payment can make a difference in the long run. Make your goal to complete your student debt consolidation loan payments within three years or shorter, especially when found a job with a good pay.
About the Author
Samantha Wilson is a consultant for managing credit cards and finding the best student loans. For years she has written student credit card articles that helps build student credit, and student loan help articles that can be used as guides to handle student loan debt.