This leads to a situation where a student has a number of loans from different donors, each with their own back pay, interest and other conditions. If payment is returned over a student can see the complex and start thinking about consolidating student loans.
1. What average student loan?
The process of consolidation of student loans means that a student or graduate today, will consolidate all loans into one loan. What happens to all old loans will be repaid with the new loan. However, federal and private loans can not be combined.
Thus, the new loan to simplify the management of the loan, but no reduction in monthly payments. If necessary, a graduate also renegotiate the payment schedule of return, monthly payments, he or she can achieve.
2. The requirements of better credit rating can reduce the interest rate paid.
When student loans were taken, a student may have worse credit score, which increased the interest of its loans. Now he has graduated and is working, he has a chance to improve credit score, which is an immediate drop in average credit score and therefore lower monthly payments.
3. You can consolidate with your spouse.
Yes, consolidation of student debt is made by the spouses, but this is generally not recommended. One reason is that if you divorce, then it is the payment of student loans.
4. Where can I consolidate?
Most federal loans can be consolidated, including FFELP and FISL and most private loans. Usually, banks and other lenders offer consolidation options that are called, but you can walk directly to the Ministry of Education to resolve the problem. Note that students and parents can use to consolidate student debt.
5. The main advantages.
Usually, the monthly payments consolidated loans are lower than the original loan. It is also a flexible solution, because you can change the rate of a variable in a fixed or extending the payment of 10-30 years, reducing monthly payments. You can deduct interest from taxes and pay more than the plan without penalty.