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There’s no way around it. If you took out student loans to pay for college, you have to pay them back. That can be tough to do, whether you’re still in school, trying to start your life outside it, or even 10 years down the line. You borrowed the money, you used it, and you have to pay it back.
What happens when that means you have to opt between paying all your bills or just those? What happens when those great debts get in the way of putting money together for a house, or a car, or a family? It just doesn’t make sense to walk through life incurring the debts of living while you’re still dragging around the ones from school.
Fortunately, there’s an answer. You still have to pay back what you borrowed, but with a student loan debt consolidation make monthly payments to just one lender.
Think of it as refinancing. The money you borrow from one lender pays off the money you owe to all those other lenders. No more juggling what’s due to whom and when. Not only that, the interest rate on the student loan debt consolidation is the weighted average of those other loans, making it lower taken as a whole and bringing your monthly payment down consequently. Some student loan debt consolidations are settled at a set rate, so you don’t have to be troubled when July 1 rolls around every year that your payment will go up.
Among the student loan debt consolidation obtainable, there are really four various student repayment plans to research and one is bound to be just what you’re looking for.
If the idea of a set rate truly appeals to you, think about either the Standard Repayment Plan or the Extended Repayment Plan. The Standard Repayment Plan gives you a maximum of 10 years to pay back, but payments are separated within that time limit at a fixed interest rate.
Extended Repayment Plans ease the burden of monthly payment amounts still further by stretching the time to pay off the loan to between 12 and 30 years (depending on the total amount borrowed). Once more, the interest rate is set for that time period, and the payments are lower. You need to understand that over time, you will end up paying a larger amount, but the monthly payments will be easier to bear.
The Graduated Repayment Plan also allows you to spread your monthly student load debt consolidation payments over a period of between 12 and 30 years, but in this case, the amount of your monthly payment will increase each two years.
The fourth plan appeals to many individuals for the reason that it takes into account what’s going on in your life. In the Income Contingent Repayment Plan, a reasonable monthly payment amount is determined based on your annual gross earnings, family size, and total direct student loan debt. Another benefit of this student loan debt consolidation repayment plan spreads the payments over 25 years.
If you’re close to the end of your student loans, think about thoroughly whether taking on a new loan is worth the time and attempt. However, if you still have a long time to go and lots of payments ahead of you – and you’ve already tired the deferment and forbearance options on your existing loans – making a new start with a student loan debt consolidation may in point of fact be to your benefit.
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