Consolidating student loans pros and cons

For some people, debt consolidation may not be the answer.

In fact, it could do further harm to your financial situation.

You may also want to consider credit counseling from a nonprofit organization like the National Foundation for Credit Counseling.

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Another perk of refinancing your loan is that you might be eligible to refinance the loan on your own.

Dropping a cosigner, which is typically your parent or another close family member, releases any extra tension in your relationship.

This option saves you a small amount of money each month, and it helps you never to forget a payment.

As soon as a new lender approves the refinance, your repayment process begins right away.

Many graduates can secure better interest rates because their credit scores have improved since they first applied for a loan.

Another way a refinancing saves you money is because it can extend the duration of your loan.If you choose to refinance your 10-year student loan into a 20-year loan, you will see a dramatic cut in your monthly payments.If you are refinancing to lower your interest rate, then you will be saving money.If a graduate has a mix of federal and private loans, it is possible just to refinance the private loans.Also, student refinancing is available to parents who have a Direct Plus loan.This figure does not even look at the student loans parents took out to help their child’s college costs. It is common for graduates to find themselves in a financial hard place when it comes to repaying their loans.

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