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Students across the country are jumping on the government student
loan consolidation bandwagon. And for good reason!
Whether you are still in school, a graduate, unemployed or comfortably
employed you can save thousands through a government student loan
consolidation by locking in record low interest rates before they
go up.
If you need to reduce your monthly student loan payments by extending
the amount of time you have to pay your debt, a government student
loan consolidation may be the solution for you.
If your loans are in default you may still reap the benefits of a
government student loan consolidation. Benefits include protecting
your credit rating, saving money by locking in lower interest rates or
lower monthly payments.
On the other hand, a government student loan consolidation may
not be the answer for you if you’re nearing the end of your repayment
term. There’s not a lot of ‘cents’ in spending your valuable time
rearranging your loan portfolio, especially if it means extending the
amount of time you have to pay off your debt. If you can manage your
existing monthly payments stick with it because you will save money
over the long term.
If you have more than one student loan, a government student loan
consolidation will allow you to combine all of them into one
monthly payment while locking in a low interest rate. Ultimately, your
debts will be easier to manage.
To help make the repayment process easier and more attractive, there
are four government student loan consolidation plans for you to
choose from.
Standard Plan: The standard repayment plan offers a fixed-rate plan
with monthly payments of at least $50 for up to ten years. Borrowers
pay less interest under this plan because the repayment period is
shorter.
Extended Payment Plan: The difference between this plan and a standard
plan is monthly payments are extended over a period of 12-30 years. If
you have a high debt load this may help you reduce your monthly
payments but the longer you take to clear the loan, the more interests
you will pay.
Graduated Payment Plan: Under this plan monthly payments start out low
and increase approximately every two years. The repayment period can
be from 12-30 years depending on your debt load.
Income Contingent Repayment (ICR) Plan: Your monthly payments via this
plan are based on your income, family size and loan amount.
Take the time to compare the cost of repaying your unconsolidated
student loans against the cost of paying a government student loan
consolidation.
It’s in your best interest to explore your government student loan
consolidation options. Consult
https://loanconsolidation.ed.gov
and participating lenders to discover if government student loan
consolidation is the right choice for you. If you decide
consolidating your student loans is in your best interest, taking the
time to compare what participating lenders offer could save you lots
of money.
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