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HOW CONSOLIDATING YOUR STUDENT LOANS CAN MAKE IT EASIER TO PAY OFF

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Having multiple student loans can mean a lot of stress. Each loan has a different payment term, interest rate and time of repayment. It can be very hard to juggle your finances and handle all these loans together. If you don’t take care, you might default on them and potentially affect your credit history.

If you’re having student debt, you want to handle this as prudently so it gives you peace of mind. And this is where student loan consolidation comes to play. Even though it might have downsides, based on your financial condition, credit counselors have shown that consolidating your loans makes it easier to pay them off. Here’s how student loan consolidation helps.

  1. Simplicity

Consolidating your student loans is simple. You have private and federal student loans that are giving you a lot of hassle. You subscribe for loan consolidation and select the best lender to collect the repayment. They use a student loan consolidation calculator to analyze your loans, current monthly payment, interest rates and type of loans. Then they finally come up with the new structure for payments. This makes loan management simple.

  1. Reduce Stress

After consolidation, they will put together all the loans as one and you will have one lender assigned for repayments. The repayment terms will be flexible enough to cover your current financial conditions. This reduces stress and makes it flexible to pay all the student loans you have.

  1. Lower Monthly Repayment

You get to negotiate the best term to pay off the loans. That means you could even get a lower monthly repayment for all the loans. You analyze your financial conditions and then come up with something better. This helps you to improve your credit score, so it does not consumer credit cards.

  1. Longer Repayment Time

You have to know that when you negotiate a new repayment for the loans, the time for full payment will change. You will have a longer time to finish paying all the loans since you now have a lower monthly repayment. This might increase interest rates. But it is worth it and makes it far easier to pay them off your student loans.

The Way Forward

To get started, meet with a financial planner or a credit counselor. Let them analyze your current financial status. Look at how much you owe, who you owe, the terms and the impact the loan is having on your career life and productivity. Then develop the best plan possible to consolidate your loans and pay them faster than you ever thought possible.

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Sean Jacobson

I'm Sean, a former HR and business consultant providing you insights into the business world for Leader to Leader.

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