Student Loan Debt Consolidation And You

Student Loan Debt Consolidation And You

The cost of higher education is more than many young people ever anticipate. And with the cost of living steadily on the rise, it’s not too hard to see why some individuals feel overwhelmed by the size of their monthly loan payments.

If you’re struggling with managing your debt and don’t know what your next step should be, consider consolidating your student loans through a program that could lower your monthly payments and save you money in the long run.

In this post, we’ll cover student loan consolidation basics like how it works, how much it costs, and how you can get started.

Student Loan Debt Consolidation Basics

Student loan consolidation is a term used to describe the act of bringing together two or more of your student loans into one new loan. This single loan more accurately reflects the current size of your debt and allows you to pay off your loans using a standard schedule and at a reduced interest rate.

Student loan consolidation does not absolve you from repaying your debts. The federal government is unlikely to forgive the balance of your loans, even if you have trouble keeping up with payments. But it may help you get out from under them sooner. With an average student debt of over $30,000 in America today, it’s no surprise then that debt relief is so popular among young people today.

Student loan consolidation can also save you money. For example, if you have several private student loans and ones from your school, consolidating those personal loans with a federal one could eliminate the private lender’s 10-15% origination fee and monthly credit check fee. That savings alone could be worth hundreds of dollars over the life of a loan.

As a result, many Americans are turning to student loan consolidation as a strategy for paying off this debt in as little as 30 years. Many people find that student loan consolidation is best for them when combined with other repayment strategies like increasing the length of your payments or switching to an income-driven repayment plan (more on these below).