How To Consolidate And Pay Off Federal And Private Student Loans
Many of you need to take out loans for funding your college or professional education. Sometimes, the parents also take out loans in order to cover their children's education. Like any other loans, you need to repay student loans within a stipulated time. You can take help of student loan debt consolidation if you're facing problems to manage your multiple student loans.
By taking out a debt consolidation loan
You can take out a debt consolidation loan to repay all your education loans, be it a federal or a private loan. A consolidation loan is similar to a personal loan. There are several financial institutions that offer such loans. However, you should shop around to get suitable terms and conditions on your loan, such as, getting the lowest rate on your consolidation loan.
a How consolidation loan helps to pay off student loan debts: Before searching for a suitable loan for student loan debt consolidation, calculate how much you require for repaying all your education loans. This will help to take out a suitable loan with which you can pay off all your student loan debts at once. By doing so, you actually replace your multiple student loans with a single consolidation loan, for which you need to make a single payment every month.
a Benefits of paying off debts with a consolidation loan:
When you consolidate and repay your multiple student loan debts with a single consolidation loan, you usually need to make a lower monthly payment as compared to the sum total of all your monthly payments toward your existing student loans. You can also get lowest possible rate on your consolidation loan if you have a good credit score.
With the help of government debt repayment plans
Instead of taking out a consolidation loan, you can take help of several government debt relief programs to repay your student loans.
a Income-Based Repayment (IBR) Plan - In this plan, you need to make a single monthly payment towards your multiple student loans. How much you need to pay per month depends on your monthly income.
a Income-Sensitive Repayment Plan - This plan helps you to pay off your FFEL (Federal Family Education Loan) Program loans. The maximum repayment period is 10 years
and the monthly payment solely depends on your income and the payable amount gets adjusted according to your monthly earnings.
a Standard Repayment Plan - By taking help of this student debt relief plan, you need to make a minimum of $50 per month over a period of 10 years.
All these methods help to pay off multiple student loans with the help of a single payment every month. So, it can be said that you can achieve the benefits of student loan debt consolidation by paying off your debts with the help government student debt relief programs.
