While student loans have helped many poor students by enabling them to pursue further studies by providing financial assistance, it can also be an emotionally and mentally exhausting journey.
Repaying a large student loan or multiple student loans can be a long burden which extends many years, well into your working years. Many students which have graduated find themselves having to set aside a large portion of their salary just to repay the student loans.
So what solution is available to help? A student loan consolidation plan may be able to help you particularly if you are repaying several student loans concurrently.
A student loan consolidation plan consolidate your student loans into one loan thus you only need to make one payment each month. This will help to better manage your finances as now you only repay one loan.
There are several types of student loan consolidation plans available depending on who you lend it from. Examples are federal student loan consolidation, sallie mae student loan consolidation etc. Check with your school or lender for more information.
There are several ways in which you can repay a student loan consolidation. The most common is a standard repayment plan. You repay a fixed amount every month until you fully repay the loan.
A graduated payment plan allows you to repay the student loan after you have graduated. It is suited for students who have no income during studies and only able to repay when they graduated and have a job.
A variable payment plan allows you to adjust how much you repay each month depending on your income level. It allows a greater flexibility and is more suited for people whose income varies each month. An example would be salesmen who earn via commission.
Another advantage of student loan consolidation is that it also helps to improve credit rating. Since you are effectively getting a new loan and your existing loans have already been cleared, it will help to improve your credit rating and easier to get financial assistance should you need one in future.
I would advise getting a federal student loan consolidation as the interest rates are one of the lowest available and the government loan is open to anyone studying in an american education institution.
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