Student Loan Debt Consolidation: Top Reasons Why You Need It

A student loan debt consolidation gives students like you the opportunity to combine your multiple federal student loans into a single loan with one low interest rate and with one monthly payment. These student loans have significantly lower interest rates compared with other types of loans.  

Education is essential if you plan to survive the corporate world, the medical field, the agricultural trade, the political ventures, or basically any other industry. However, education is also costly considering the cost of tuition, books, manuals, computers, and other requirements you might need along the way. If you rely on your own back for financial support, you can expect the burden of debts to be a hindrance to your goal. 

Fortunately, there are debt consolidation loans for students to help you alleviate these debts. 

Who offers student loan debt consolidation?

According to the Federal Family Education Loan (FFEL) Program, the following organizations can provide student loan debt consolidation:

1. Banks
2. Secondary markets
3. Credit unions
4. Other lenders

Under the William D. Ford Federal Direct Loan (Direct Loan), the government can provide student loan debt consolidation. 

What are the types of student loans?

There are 2 types of student loans: federal student loans and private student loans. 

The US Department of Education’s Federal Student Aid programs distribute federal student loans. This type of loan is the easiest to obtain. On the other hand, standard lending institutions and banks offer private loans.  

Either type may be used to fund your schooling, but never combine both when setting your student loan debt consolidation. The reason behind this is that interest on federal student loans is tax deductible, giving you the benefit of deferring payments when you go back to school. 

Federal student loans have lower interest rates. Repayment periods may also be extended to 30 years depending on the loan balance. Repayments are also consolidated into one check payment each month. Private student loans do not have these advantages of debt consolidation since they are similar to usual loans.  

Remember, if you combine federal student loans and private loans under your student loan debt consolidation, you will lose all benefits of federal loans consolidation. 

What are the advantages of student loan debt consolidation?

Student loan debt consolidation has a lot of benefits:

• You only have to repay the one who offered you debt consolidation instead of paying multiple creditors
• The interest rate is much lower than other loans
• The terms and conditions are tailored to suit your needs
• Repayment can be made when you get employed
• Repayment term can be extended from 10 to 30 years
• There are no extra or hidden charges
• You can apply online without the need to meet lenders personally