Why Consolidate Student Loans: Know the Pros of Cons
The class of 2014 has the highest amount of student loan debts. according to a government analysis by Mark Kantrowitz, publisher of a group of websites about planning and paying for college, Edvisors, the average student has to pay back an estimated $33,000. So, instead of looking back at your college life with appreciation and happy recollection, you would be worrying about how to pay your debt and for how long you would have to struggle with it.
So why not consolidate your student loan? Consolidation is said to make your life easier, especially if you owe money from 5 to 10 separate lenders. Other people, however, would disagree, saying there are negatives to this process.
List of Pros of Consolidating Student Loans
Single payment to worry about
In a nutshell, consolidation is one lender, one payment. All your federal loans will be
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when inflation happens, each of your loan has to be adjusted, which can be stressful, especially if you think about the changes in your repayments. When you choose to consolidate interest rates on all your loans will be averaged and then rounded up to the nearest 1/8 of 1%.
Lower repayments
Through consolidation you have a chance get reduced interest rate and lower your monthly repayment this is because your loan terms can be extended from 10 up to 30 years. Who doesn't want an affordable loan that you can repay as you go along? Know though that longer payment terms may mean higher interest rates.
Better deferment or forbearance options
A federal consolidation loan will be considered a new loan, which means you start from square one in terms of deferment and forbearance for up to 3 years. You can even delay paying for up to three years, if you apply for unemployment or economic hardship deferment, in the event that you are still unable to find employment.
List of Cons of Consolidating Student