There’s no way around it. If you took out student loans to pay for college, you’ve to pay them back. That can be hard 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’ve to pay it back.
What happens when that means you’ve to select between paying all your bills or just those? What happens when those outstanding debts get in the way of putting money together for a house, or a automobile, 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.
Luckily, there’s an answer. You still have to pay back what you borrowed, but with a student loan debt consolidation make monthly payments to only 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 overall and bringing your monthly payment down accordingly. Some student loan debt consolidations are settled at a fixed rate, so you don’t have to worry when July 1 rolls around every year that your payment will go up.
Among the student loan debt consolidation available, there are in fact four different student repayment plans to investigate and one is bound to be just what you’re in search of.
If the idea of a fixed 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 relieve 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 sum borrowed). Again, the interest rate is fixed for that time period, and the payments are lower. Be aware 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 sum of your monthly payment will boost every two years.
The fourth plan appeals to a number of folks since it takes into account what’s going on in your life. In the Income Contingent Repayment Plan, a realistic monthly payment amount is determined based on your twelve-monthly gross income, 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, consider watchfully whether taking on a new loan is worth the time and effort. But, if you still have a long time to go and many payments ahead of you – and you’ve already exhausted the deferment and forbearance options on your existing loans – making a fresh start with a student loan debt consolidation may in fact be to your help.
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