Student Loan Consolidation – How To Repay Your Student Loan Debt

There are a number of persons who face a lot of problem to repay their student loans. If you are one amongst them, then you can take help of student loan consolidation to repay your existing debts/loans. One of its greatest advantages is that it helps you in simplifying your repayment procedure as you need to make a single payment towards your student loans/debts.

Types of student loan consolidation

You can consolidate your student loans by 2 ways, namely, student loan consolidation program and debt consolidation loan. Each of these ways is described in the following lines.

1. Debt consolidation loan

A debt consolidation loan can help you to repay your multiple student loans. It is like a personal loan, which you can take out from a financial institution; it’ll help you to combine your multiple student loans and replace it by a single debt consolidation loan. Before you take out the loan, you can make yourself aware of its basics, which are described below.

• Eligibility criteria: First of all, you need to have good credit. Along with it, you should have a number of student loans that you’ve taken from different lenders; you should also face problems in staying current on your loan payments.

• Benefits: One of the greatest advantages of debt consolidation loan is that it helps you to combine your multiple monthly payments and replace it by a single payment every month. These loans are usually available at low interest rates and at an extended repayment term that help you to reduce your monthly payments.

2. Student loan consolidation program

You can take help of a loan consolidation program, which is offered by various debt consolidation companies. As soon as you enroll yourself in a consolidation program, the company will start negotiating with your creditors to reduce the interest rates on your loan. With your creditors’ approval, it will also decide upon a monthly payment that you need to make towards your student loan debts. After you make your monthly payments to the company, it will distribute your payment amongst your creditors, on your behalf.

• Eligibility criteria: If you want to consolidate your loans, then you need to be in repayment status of your student loans and you should not be enrolled more than half time in school.

• Benefits: As you enroll yourself in the program, you’ll stop getting harassing calls from your creditors and collection agencies. You can also save yourself from negotiating with your creditors, as the consolidation company will do it on your behalf. However, one of the most important advantages of student loan consolidation program is that it will have no adverse effect on your credit score.

While consolidating your student loans/debts with the help of a student loan consolidation program, you should remember that you’ll not be able to combine your federal student loans and private loans together, as each of them have different terms and conditions. However, if you have different types of student loans and want to consolidate all of them, then a debt consolidation loan will be more fruitful to you.