Low Interest Rate Student Loan Consolidation
It is becoming increasingly difficult for average Americans to afford a higher education. The increasing cost of a college degree, combined with the turbulent economy, has made it almost impossible for most students to afford the cost of their higher education without help from financial aid. But with the limited amount of grant money and scholarships available, student loans have become an integral source of funds. However, unlike grants and scholarships, student loans have to be paid-and with interest.
The continuous increase in the cost of education means that students are often forced to take out more than one loan over the course of their education to cover the costs of tuition, books and study materials and other expenses. After graduation, this makes repayment more difficult because students have to manage multiple payments every month.
Consolidation is one way to address this issue. Consolidation allows borrowers to combine all of their student loans (should they have more then one) into a new single loan with one interest rate and one monthly payment. This lowers the risk of defaulting on loan payback and also removes the hassle of keeping up with multiple loan payments every month. It can also help you manage your loans in a better way and make repayment convenient.
Loan consolidation makes it easier to manage repayment. But it also can also help borrowers by potentially lowering your interest rate. New interest rates are calculated by taking into account interest rates of each loan the borrower has taken out and calculating an average interest rate. This average rate is usually fixed, meaning that the interest rate won’t fluxuate due to economic factors. Low rate student loan consolidation institutions the federal government (for federal student loans) and private financial institutions (for private student loans).
Low interest student loan consolidation programs may even allow for lower monthly payments (by lengthening the repayment period)-thus keeping monthly payments affordable for students who are already on a limited budget.
Types of Student Loan Consolidation