Benefits of Consolidating Your Student Loan

Consolidating a student loan often lowers monthly payments and allows the borrower to have more time before they have to pay back the loan. There are consolidation programs availible for both federal and private loans. College students who consolidate their loans also often save money on interest and such because the government recognizes that they are in debt due to school, so some leeway is given. Many times there are also no prepayment penalties, so that if you are ready to pay off the loan early then you can do so. Student loan consolidation is great for college students and it can make the future a lot brighter and the present a lot less worrisome. Consolidation of your college student loans can also improve your credit rating.

What is student loan consolidation?

Student loan consolidation is something which many college students try to do. It is a way to to consolidate (or combine) the loans that a college student owes. In the United States there are two organizations, the FFELP and the FDLP, that allow students to consolidate PLUS Loans, Stafford Loans, and Federal Perkins Loans. What is the benefit of consolidating a student loan? Well, consolidation loans tend to have longer terms that traditional loans. Debtors usually have the option between 10 and 30 years, which is usually ample time for a student to finish school and get a job. The Federal Loan Consolidation program in the United States was created in 1986.