Applying for a student consolidation loan

If you are currently struggling financially trying to repay your loan…and watching your credit score sink into the red zone, then you may want to think about applying for a student loan consolidation. Many people do not even know what a student consolidation loan is – that is why I am here to shed some light upon the subject.

What a student loan consolidation is – all of your students loans that you have open are put into one loan, with a lower interest rate, this way you can make adjustments to your budget and you can save – and greatly improve your credit score as long as you are making your payments on time. The bad thing about a student loan consolidation is that the loan will take longer to pay off then you had originally planned, so you must choose to struggle for a little while or have some breathing room when it comes to paying your student loan bills.

Think of it as a fresh start, a brand new more manageable type of loan for those that are having a hard time making multiple monthly payment in large sums, a student loan consolidation will be able to take care of this. Now if this sounds like the right choice for you to make, there are four different direct student loan consolidation plans that you can pick from.

The 1st type of student loan consolidation plan is called the Standard Repayment Plan. This is great because the amount you have to pay back monthly is a fixed rate, so it never changes throughout the course of the loan, which is up to 10 years.

The 2nd type of student consolidation loan is the Extended Repayment Plan. As the name implies, this type of loan is spread out from 10-30 years, which means you can get some pretty low payments. The bad thing is just like most extended loans, you will be paying a much larger sum in the long run.

The 3rd type is the Graduated Repayment Plan, this is similar to the Extended Repayment Plan because you have 10-30 years to repay the student loan, but the catch is the monthly payment will increase every couple of years.

Finally, if you are someone that currently has a job and family, there is a plan that is made just for you called the Contingent Repayment Plan. This plan will take in how much you make a year, the size of your family, your entire student loan debt, and come up with a fixed monthly payment plan that will last for 25 years.

If you are someone that almost has their student loan payed off, say only a couple of years or so, then a student loan consolidation may not be the best option for you. If you think that you might need to get a student loan consolidation and you are still in school, you can apply for one, and even get a 6 month period of grace, meaning your payments will not start until 6 months after you graduate college.
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