Now is an excellent time to look into consolidating those student loans. Federal student loan consolidation is offered by a number of independent companies. Most people who have student loans will often receive information in the mail telling them how they can save money and have their loans paid off in a shorter period of time if they consolidate. This is not always the case, but federal student loan consolidation can make it easier for a lot of people to stay current with their loan payments.
If someone has been considering consolidating his student loans, now might actually be the time to do it. Rates are currently the lowest they have been since 1987. Most services list the current rate at right around 3.375 percent. This low interest can help borrowers actually pay of some of their principal each month.
Benefits and Requirements of Federal Student Loan Consolidation
People think that extending current loans will give them the same benefits as consolidation. However, an extension will actually increase the amount of overall interest paid, while consolidation can reduce the amount. Along with lower payments, student loan consolidation offers a number of other benefits. There are often discounts for people who have loans exceeding $10,000. Also, some lenders will give a 1 percent discount to anyone who makes 36 consecutive on-time payments.
Each company that offers consolidation will have slightly different requirements for approval. However, a person does generally have to have loans of at least $7,500 to qualify. Some services do not do credit checks, which is truly a rarity in the world of loan consolidation. Assessing all of your loan options is key to finding the consolidation program that suits your needs–and finding one whose terms you can handle.