Thomas Erikson asked:


Consolidate graduate student loans and lower your monthly payments, lower your interest rate and simplify the process by having only one loan.

For graduate students, consolidating your student loans becomes even more important than for undergraduate students. Because you generally carry significantly higher debt from being in school longer, making it more manageable when it comes time to repay is essential.

Based on the National Postsecondary Student Aid Study, graduate students average between $27,000 and $114,000 additional debt on top of their undergraduate debt. Here are 4 benefits that consolidating your graduate student loans provides.

The single most important benefit when you have a large debt is lowering your monthly payments so it is more manageable. When you consolidate graduate student loans, you replace your multiple student loans with one large consolidation loan. The total amount you pay each month with the consolidation loan is significantly less than the total amount paid each month on the multiple loans. This can be done by extending your consolidation loan period up to 30 years.

By consolidating your loans, you simplify the whole process. It’s much easier to keep track of one loan instead of multiple loans with multiple lenders and due dates. Also, the amount of paperwork and other hassles are greatly reduced.

It should be noted that if you have both federal and private student loans, you will want to consolidate these separately. Federal student loans (graduate or not) receive special benefits and conditions which are lost if consolidated with private student loans. So if you have both, you will want to have one consolidation loan for federal student loans and one for private.

The process of consolidating your graduate student loans provides the opportunity to receive lower interest rates. This helps offset the cost of extending your loan period in order to receive lower monthly payments. The lower interest rates on larger loans can help you save a great deal over the life of the loan.

When you consolidate graduate student loans, you essentially pay off your existing student loans with your consolidation loan. By paying off loans on time or early, you improve your credit score.

This can benefit you in the future by providing better rates on your car loan or mortgage. For a mortgage, even a small improvement in interest rate could translate into thousands if not tens of thousands of dollars in savings.

If you want to lower your monthly payments to a more manageable level, deal with only one lender, get a lower interest rate and help your credit score, you should consolidate graduate student loans. Make your student loans fit your financial situation – it’s the smart choice.



Posted by Nikhil Gupta

Gray Rollins asked:


For many people, the student loans they carry after they graduate from college are their very first debt. This means that terms like fixed rate, variable rate, and consolidation are new and unfamiliar. Learning about financial terminology can be intimidating, but the more fully you understand your student loan package the more likely you will be to be able to develop a smart and realistic plan to get out of debt. Understanding your loans can help you save money while you develop the financial know how that will help you throughout your lifetime. There are two basic kinds of student loans. One has a fixed interest rate, and one has a variable interest rate. A fixed rate loan will keep the same interest rate that it has now for the duration of the lending period. With a fixed rate loan, the interest rate will stay the same as it is today no matter what kind of changes, growth, or crashes the financial sector experiences in the coming years. A variable rate loan is subject to market fluctuations. If your loan has a variable interest rate, the amount of interest you will be asked to pay in the future can rise and fall with market trends.

When it comes to student loans, the biggest question is whether to consolidate your loans or not. In some cases, consolidating your loans can lower your monthly payments and help you avoid high interest rates which is a winning combination that can save you money in the short term and in the long run. However, consolidation doesn’t make sense for everybody. Before you decide whether to consolidate, get to know your loans.

Consolidation allows you to combine several loans of different types into a single, fixed rate loan. This means that you will only have to make a single payment every month, no matter how many lenders initially helped you pay your way through school. Often, consolidating a loan allows you to extend the repayment period, which means lower payments every month. So if you are finding that your monthly payments are becoming a serious financial burden, consolidating can offer you relief. However, lower payments also mean a longer repayment period. So if your top priority is to get out of debt quickly, consolidating your loans may not be a good choice. If one or more of your loans are variable rate, consolidation can offer you security by allowing you to plan on a fixed interest rate for the duration of your repayment period. However, in many cases the interest rate on a consolidated package is a bit higher than the average market rate, so if the majority of your loans are already fixed rate it usually doesn’t make financial sense to consolidate.



Posted by Nikhil Gupta