Student Loan Consolidation is all about combining all the loans you have and allowing one lender to pay off all the loans. Student loan consolidation is something like a refinance mortgage loan that allows individuals who are in debt to make their payments in a better and more convenient way.
When your loan is combined it allows you to make regular payments at lower interest rates and makes the debt more manageable.
There are different types of student loans available the best way to categorize them is Federal student loans and private student loans.
Federal student loans are initially run through the US Department of Education’s Federal Student Aid programs, and are easy to avail. The Federal government usually allots approximately $60 billion for student loan consolidation purposes and these help students pay off loans, work and study and helps supports various grants.
One of the most popular forms of federal grant programs is the Stafford loan for students but others include military and ROTC plans.
The second category of loans is the private student loans. These are administered by lending companies like Sallie Mae. These companies provide unsecured loans and then charge high interest rates. While their rates are higher than federal grants they have more flexibility of payments for students.
When attempting to consolidate your loans you should separate the private and the federal loans. Federal loan consolidation has several advantages some of which are:
– Low interest rate [however the rates keep changing]
– Long term loan repayment plans
– Low monthly payments
– One lender
The federal student loan consolidation services offers students a reliable and convenient way to pay off their debts without overburdening themselves with debt as they struggle to make their way in the world.