April 24th, 2018 | Updated on January 23rd, 2019
For students who have to opt for a loan in order to meet their academic career needs, paying off a certain amount every month becomes a huge burden. The case is worse for those who have multiple student loans and are left with no option other than to file for debt coverage plans.
However, in recent years, given the changes in the world economy, alternatives like debt consolidation have simplified the payment of loans.
Now, borrowers who have many student loans can easily repay the outstanding debts in the market. In case of students, debt consolidation loans are often called as the student consolidation loan.
How Student Consolidation Loan Simplifies Monthly Payments?
Student loan consolidation is the method of combining multiple student loans into one and paying off the creditors. After that, the borrower is provided with a new monthly payment of that loan at a comparatively lower rate of interest.
This is a huge advantage to students who are unable to pay off their enormous debts. With debt consolidation of student loans, you can ease the pressure off your shoulder to a great extent. Some key points to keep in mind while considering student consolidation loans:
- You can avail the option of debt consolidation when you leave school, graduate or during your grace period.
- Based on the variety of loans you have acquired, you will be given the opportunity of procuring a debt consolidation loan depending on your situation.
Different Types of Student Consolidation Loans
Professional debt consolidation companies like nationaldebtrelief.com has stated that there are two forms of student consolidation loan in the market – direct consolidation and private consolidation loans for federal and private students respectively.
1. Federal Student Loan Consolidation
In case you have federal student loans, you can secure direct consolidation loans after your graduation. Neither a credit check nor any fees are required when you opt for a direct consolidation loan. You get to secure a new loan and the interest rate is calculated as an average of the interest rates that you used to pay before. Not only does it simplify your repayments, but you can set the term of repayment up to thirty years of time period, making it easier to repay the loan.
2. Private Student Loan Consolidation
If you have private student loans, opting for a debt consolidation service provider for consolidating your multiple loans seem to be an ideal choice. The only requirement is to keep a good credit score in order to be eligible for procuring the loan. A good credit rating will also decide the rate of interest on your new loan.
3. The Final Verdict
When it comes to flexibility in loan procurement and payment, private debt consolidation loans remain a step ahead of the federal direct consolidation loans. Depending on your credit score and type of student loans, you can also get a better interest rate with a private consolidation loan than a direct consolidation loan.
Borrowers with multiple student loans can easily focus on their career by taking a debt consolidation loan. Compared to other debt coverage options, a debt consolidation loan appears to be more feasible.