Consolidation eligibility

If you have multiple school loans then you need to consolidate. Unfortunately, some people don't bother to do this because they don't want the hassle of paperwork, or they don't think they can qualify for a consolidated loan; however, this couldn't be further from the truth. All that's required from you is a list of your outstanding school loans and the name of the lenders, as well as account numbers, and your new lender will handle everything else on that end. Yes, there are a few forms to sign, but it is not as complicated as you may think. And as far as eligibility goes, if you're consolidating federal school loans then you're automatically eligible. If, however, they are private loans, you will need to be in good standing with all of your lenders. So you see it's really not as difficult as it seems.

School loan consolidation interest

School loan consolidation provides many benefits, the most important of which is a lower monthly payment. In addition, you don't have to worry about paying three or four different lenders, but just one. This also means that you don't have multiple adjustable interest rates either, because when you consolidate you get a fixed interest rate based on the weighted average of all of your loans, which can't exceed 8.25% by law.

Repayment terms save graduates money

However, it is not a lower interest rate that is going to save you money, as some lenders would have you believe, but the repayment terms. In fact, when you consolidate you will probably not end up with a low interest rate. So to help make consolidation worth it to graduates, lenders offer longer repayment terms around 15 to 25 years, instead of the standard 10 year plan on multiple loans. This means that you will pay more in interest in the long run for the benefit of having lower monthly payments.

Graduates need to consolidate now

Regardless the amount of interest, consolidating is still a smart move because most college grads are strapped for cash as it is, and could use some extra monetary help. You can also increase your monthly payments as your financial position improves and your career takes off. Most lenders don't penalize you for early repayment; thus, school loan consolidation is a big win for students. If you've graduated and are nearing the end of your grace period on your multiple loans, then the time to act is now. Start saving money right away. School loan consolidation can help.