Benefit of consolidating student loans

Most students consider this as a daunting process and fail miserably.

On the other hand, if you have only one loan, you should sign only one cheque and remember one due date.

Student loans usually appear on a credit report as multiple loans, but that doesn’t look bad to lenders.

The reason has to do with the way student loans actually work as opposed to how we think about them.

While federal student loans are fixed-rate, private loans can be either fixed-rate or variable.

At first glance, variable rates may look appealingly low — 2.25 percent or 3.25 percent — compared to fixed-rate loans that ask for 6–7 percent interest.

At a time when the economy is still in recovery and finding a well-paying job is easier said than done, the results of this debt could be devastating.

Perhaps that’s one reason around 7 million borrowers are in default, according to the Consumer Financial Protection Bureau. Consolidating your student loans can be a great way to ease financial strain — and the stress that goes with it. There are repercussions to refinancing that you should know before you sign on the dotted line.

As long as you make the payments on time and in full, the multiple student loans showing on your credit report will not have any negative effect on your ability to get new credit.

You may have been wondering, “Should I consolidate my student loans? Here are a few of the benefits of consolidating your loans. This If rates have dropped since you originally borrowed your loans, or if your financial situation and credit score have improved, lowering your interest rate could save you a decent chunk of change — and may also allow you to pay your loans off faster.

Change your variable interest rate loan to a fixed-rate loan.

Student Loan Forgiveness is a repayment incentive program that allows borrower’s student loans to be forgiven after a certain number of qualifying payments.

The main forgiveness programs that are available to Stafford Loan borrowers are Public Service Loan Forgiveness and Teacher Loan Forgiveness.

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