You made it through college! That’s great! But did you end up with a mountain of debt in the form of student loans? If so, you are not alone. With the high cost of a higher education, more and more people are having to finance it with the help of student loans. Luckily the programs exist, but unluckily it can leave you deep in debt before you even start on your new career. One thing that might help you is to consolidate your student loans so that you only have one payment to make each month and it is reduced in amount.
Student Loan Consolidation Programs
Student loan consolidation programs help people to take control of their finances by lumping all their loan payments together into one easier to pay loan. This could reduce your monthly payment by up to 50% or more. The amount of the reduction depends on the amount of your other loans and the type of program you opt for.
Consolidating your student loans might also qualify you for a lower interest rate on your new loan therefore reducing your payment even more. Plus if you combine all your smaller loans into a single loan, it might help to improve your overall credit score or at least help to maintain its current status since you will be able to meet your monthly obligations easier.
Programs for Defaulted Student Loans
There are even programs that were designed specifically for defaulted student loans. This type of program also includes credit counseling. The consolidator will buy your existing student loans so they are paid off and then you will have one monthly payment to the new loan company who will help you rebuild your credit.
Thanks to this program, you will be better able to keep your monthly payments on track since the amount you have to pay each month will be lower. Your credit rating will begin to improve and you won’t have to endure any more embarrassing phone calls or threats of wage garnishments.
Federal Direct Loan Consolidation Program
Another program for student loan consolidation is the federal direct loan consolidation program. This can also reduce your payments up to 50%. The good thing about this loan is that it usually has a lower interest rate so that it keeps the payments low and guards you against inflation.
If you are having problems keeping up with your monthly student loan payments, then you ought to look into consolidating them into a single loan. Doing so can actually lower the payments as you might get a lower interest rate and stretch the loan life out over a longer period of time. Having to pay less each month on your student loans means you will have more money available for paying your other bills.