The need for student loan debt consolidation is increasing. As education costs in the US are spiraling out of control, very few students are being able to manage their college degree with their own funds. While their parents have numerous debt obligations that they have to meet in a particular month, they’re not being able to adjust themselves with the burgeoning college costs. The US Department of Education offers federal educational loans at affordable interest rates that can be taken out by the students who are financially needy. The student loans are extremely convenient loan lending options but when you get addicted and keep on taking out too many such loans, you again lose the ability to keeping up with the monthly payments and this gives birth to student loan debt for which you may seek help of the debt consolidation loans.
According to recent reports, student loan debt is feared to be the next debt crisis, surpassing the consumer credit card debt level. The biggest reason for the large number of student loan defaults is the stubbornly high unemployment rate and the lack of jobs within the economy. The student loan debt crisis will probably shake the US economy and make it backslide into yet another stage of recession. If you’re such a student who is stuck in this debt crisis, you should immediately look for options through which you can get rid of this crisis. A debt consolidation loan is a perfect debt repayment tool that helps the students combine their multiple payments and repay the entire amount with ease. If you’re not aware of the ways in which you can benefit by taking out such federal direct debt consolidation loans, you should read on the concerns of this article.
Student Loan Debt Consolidation:
- Flexible repayment options: When you take out the direct debt consolidation loan, you will be able to choose among various flexible repayment options and you also have the permission to switch from one repayment plan to another according to your changing needs. The most common repayment options are Income Based Repayment Plan and the Income Contingent Repayment Plan. You can choose either according to your present financial needs.
- Single outgoing payment in a month: As you’ll take out the direct debt consolidation loan from the US Department of Education, you just have to make a single monthly payment to them instead of writing multiple checks. You can thereby waive off the tension of remembering multiple due dates of multiple lenders. By making a single outgoing payment, you can easily save a considerable amount of money every month.
- Revised interest rates: The interest rates on the student loans are so high that most students can’t make timely repayments on the loans. This is why debt consolidation benefits such students as the interest rate on such loans will remain low enough. With low rates, the monthly payments will also be revised and you can save a certain amount of money every month.
- No minimum amount for qualification: Usually, when you have to take out a debt consolidation loan, the lender will ask for a minimum of debt amount in order to qualify for the loan. But in case of the student educational consolidation loans, you can take out such a loan with any amount of debt that you owe.
- Augments your credit score: For a student, you have to be responsible enough regarding your credit score so that the employers don’t reject you for a job. The landlords, the lenders and the insurers will all check your credit score before transacting with you and therefore you need to improve your score before you take any further decision.
Therefore, when you’re wondering about the ways in which you can bid goodbye to your student loan, choose to consolidate your debts into a single monthly payment. However, don’t miss the payments as this may have a bad impact on your credit score.
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