Why? That is a simple question that can be put forth in any scenario. Why consolidate student loans? You always need to pay the best rate possible, and that rate may come about with consolidation. You need to look at every option possible. So learn a little bit more about consolidation and see if it is right for you.
 
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Why Consolidate Your Education Loan

You have student loans, and you’re wondering why you should consider education loan consolidation. Here’s the bottom line: it will save you money. This page was designed to help you decide if education loan consolidation is right for you and explain how it will benefit you.

Is Education Loan Consolidation for Me?

To decide if education loan consolidation is right for your situation, ask yourself these questions:

  • What are the interest rates on your student loans? Interest rates are at all-time lows right now, so, chances are, your student loan rates are higher than the market rate. You might also have loans with variable interest rates. This is not an optimal situation for you because rate fluctuations could end up costing you a lot of money before you’ve paid off your loans. With either situation (high rates or variable rates), education loan consolidation can help you lock in a rate as low as around 5%.
  • Are you able to manage your monthly payments? Are you struggling to make ends meet just to manage your monthly student loan payments? If so, it doesn’t have to be that way. If you are struggling to make your student loan payments, you need to reduce your payments with education loan consolidation. You can reduce payments by up to 60%, which will mean more cash in your pocket.
  • How many monthly payments do you have? If you send student loan payments to more than one lender each month, then consolidation can make your life a lot simpler and more convenient. With education loan consolidation, you have the convenience of a single lender and a single monthly payment. That means less worry for you.
  • How many payments remain on your loans? If you almost have your student loans paid off, then education loan consolidation might not make sense. However, if you are not close to paying your loans off, then consolidation can help you reduce the amount of time it takes you by lowering your payments.

How Education Loan Consolidation Benefits You

By combining your education loans into a single loan, you will reap many benefits. These benefits are outlined below.

  • Flexible repayment options. Education consolidation loans offer a tremendous degree of flexibility in your payment plans. In fact, you can choose from up to four different repayment plans, and you can switch plans at any time. One of these repayment options includes an income contingent repayment plan, which determines your payments based on how much you’re capable of paying at the time.
  • Various deferment options. Pursuing education loan consolidation might qualify you for renewed deferment options. Even if you have used all of the deferment options on your current student loans, applying for education loan consolidation might renew these benefits.
  • One monthly payment, one lender. Instead of paying many lenders for several loans at different times of the month, you can make one simple payment to one lender once a month. This can make it a lot easier for you to manage your debt. You also will not have to worry about multiple due dates on multiple loans, so it takes the hassle out of paying your bills.
  • Lowered monthly payments. If your student loans are breaking your budget, education loan consolidation can help lower your payments drastically. With many consolidation loans, borrowers cut their payments in half.
  • Retain your subsidy benefits. If you have a subsidized loan, don’t worry about losing these benefits upon consolidating. There are two portions of an education consolidation loan: unsubsidized and subsidized. This means you can carry over your subsidy benefits into the subsidized portion of the loan.