Youve graduated from college and entered the real world. Now all you have to do is figure out your student loans. On average, college students graduate with a whopping $20,400 in debt. Consolidating your student loans can be helpful if you have a large balance spread out across multiple lenders. Before you apply, make sure you know the pros and cons of consolidation:
In situations like these, the first advice a counselor could give is to calm down. It does not sound helpful at first and for some, it doesn't even sound nice, nevertheless, following the advice is worth it because you will need to calm down before you think things straight why you arrived in this situation in the first place. Usually, the best people you could contact and talk about your loans are agencies that specialize on keeping loan reports. Internal revenue is usually the agency in charge in keeping this data to be use for later purposes. Your credit loan servicer is also a source of such information. They could you an assessment of your student loans the way you need it and could even direct you to the right people or agencies who can give you sound financial advice.
Consolidation makes it easier to manage your debts. Borrowers with multiple federal student loans can have a hard time keeping track of when to pay and how much is due each month. When you consolidate your loans, youll only have one payment to make each month. Plus, youll only have one lender to deal with.
Consolidation comes with some other perks. Consolidating your student loans can help increase your credit score by reducing the number of open accounts on your credit report. You can also get a better deal on a consolidation loan if you meet certain special requirements, such as if you graduate within 6 months of the consolidation period and/or if you pay your loan on time consistently.
Consolidation may not be your best option. There are other programs available to help you repay your loans or have them forgiven. Government programs exist that help borrowers repay their student loans by doing community service or becoming a teacher in certain areas. If you have a Perkins loan, there are opportunities that allow you to have the debt forgiven. It is a good idea to research all your options before you consolidate.
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