When a student enters the “real” world with their college degree in hand, they may also be carrying a heavy load of student loan debt. Unfortunately, with the high cost of a college education today, it is highly likely that student loans and other aid will be required in order to pay the hefty tab.
In many cases, just one student loan may not be enough, prompting students to borrow from multiple sources each loan typically carrying a different interest rate and a different payment at various times throughout the month.
When the time comes for repayment, it can start to seem like the borrower just about gets their debt obligations paid in one month when the next month comes along and they have to start all over again.
Student Loan Consolidation Can Be the Solution
There is a solution to the merry-go-round of paying off student loan debt and it doesn’t entail filing bankruptcy and ruining your credit score. In fact, in most cases, this solution can actually raise your score almost immediately.
Student loan consolidation entails taking several of a borrower’s student loans and combining them into just one single loan with one monthly payment that is oftentimes far less than the total amount the borrower is paying on their current student loan obligations.
How Does Student Loan Consolidation Work?
When a borrower consolidates their student loans, they will usually be required to meet with the new potential lender in order to allow the lender to better understand how to structure the new consolidation loan.
Most lenders will have a minimum and a maximum amount of debt that a borrower may consolidate. In addition, like many other types of loans, the interest rate on the new consolidation loan may vary, depending upon the borrower’s credit and other factors.
In most cases, however, the new loan will have a lower rate of interest. This alone will help in lowering the monthly loan payment. However, it is also likely that the new loan will have a longer payment term so, by stretching out the term, the borrower’s monthly payments will be lowered sometimes by a considerable amount as versus the amount that they were paying on the previous multiple student loans.
Borrowers will also need to determine where to go for a student loan consolidation. For example, certain lenders will only consolidate government related student loans and, conversely, others may only work in consolidating private student loans that have been borrowed from sources such as banks and/or credit unions.
How to Get Started
For those who are struggling with private student loan debt, Cedar Education Lending can help you in walking through the student loan consolidation process. There are applications online, so you can begin the qualification process immediately. You can even get an estimate of what your new consolidated loan payment will be by using the online student loan consolidation calculator.