7 Reasons to Consolidate Federal Student Loans Today

Usually there are many advantages as well as disadvantages to consider when it comes to consolidating your student loans; however, today the advantages far out weigh the disadvantages. If you are like most people then you probably have a considerable amount of student loan debt with more than $20,000 to pay back. When trying to paying off debts of this size, it’s important to have a low interest rate to avoid paying thousands in interest over the life of the loan. It’s also important to be able to manage this money efficiently so you can pay it off as quickly as possible. Here are eight reasons you should be consolidating your student loans right now.

  • Interest rates for student loans are at an all time low. Rates have dropped just below 2.5{421b746ef4f4588dfd87c8acf16c9c4b10a4a0127eaff1927a04f4091b6d6d60}. Locking in a rate this low will save you thousands in interest payments over the loan term.
  • You also have a chance to get your interest rates even lower because of incentives that consolidation companies offer for paying on time consistently and for automatic payments.
  • Consolidating will allow you to have a much lower monthly payment, so that you can add more money towards principal. Consolidating at a low interest rate can reduce your monthly payments by as much as half.
  • Consolidating combines all of your student loans from different lenders into one convenient monthly bill, making managing your loans a simple process.
  • Consolidating your federal student loans will allow you to choose a payment plan that is suitable to your income. You can stretch your payments over a longer period of time in order to get a much lower monthly payment. There is also an option to apply for reduced payments for those who qualify.
  • There is no penalty for paying your student loans early, so obtaining a lower monthly payment through your consolidation, will allow you the option to put more money toward principal.
  • Due to the down economy, many companies have stopped consolidating because it has become unprofitable for them. That’s good news for you though. Currently, the only way to consolidating loans is through the federal government with a company called Federal Direct Consolidation Loans.
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