Sometimes, students get overwhelmed by students’ debts. In this case, student loan consolidation companies can come in and provide a way to reduce the student’s monthly payment with a consolidation loan. However, not all companies offer equal value, and before you rush into signing on the dotted lines, it is wise to consult a financial professional.
Benefits of consolidating student loans
- Simplicity- The process of consolidating your student loans can result in less complicated loan situations with only a maximum of two months’ payments to monitoring. Many sources advise students to consolidate federal loans separately, which goes to private loans. The idea of merging will help you monitor and keep track of all your loans, keep you well prepared and avoid forgetting to make payments that can eventually result in late fees and ultimately damage your credit reputation.
- There is a chance that interest rates can be lowered monthly.- Consolidating your loans can lower your total monthly payment by either reducing the interest rates or lengthening the repayment period. However, this will only depend on the interest rates and terms of the current loans.
- The students get financial stability because the interest rate will be fixed.
- Finances become simple as you will only have to deal with one payment every month.
There are advantages of using student loan consolidation companies also means drawbacks. If you are not careful when signing, you might end up with a new loan, which won’t save you money as you had desired. Also, if you fail to address any condition that led you into getting a new debt at first, you can even find yourself in significant debt within a few years.
Cons
- Longer repayment period
- Potential higher rates
- Loss of benefits
- Beware of variable rates
Student loan consolidation companies
Splash Financial
This company is a student loan lender operating in about 50 states. The loans available in this company include; federal, private, and parent plus loans, which have MBA, law, undergraduate, medical, and graduate credits. The company offers the clients a fixed and variable rate for a term of 5 to 25 years. The minimum amount of a loan is $5000 with no maximum. The good thing about this company is that once the student receives the loan, whether they repay early or late, they are not penalized, whichever the case. It is recommended for situations that require instant decisions.
College Ave
This is another platform where students can access loans and borrowers across all 50 states. One can access graduate, undergraduate, and parent loans on this platform. The lender focuses on simple applications with instant decisions. The payment period given to the borrower is between 5 to 15 years. A student can get a loan of about $1000 or all the school-certified costs of attendance. Also, the borrowers can decide to make total payments while still in school or pay interest only, defer payments, or a flat fee. Moreover, the students enjoy the free origination and prepayment, unlike when they are charged for such cases.
Citizens bank
This bank offers fixed and variable rate private student loans for a parent, undergraduate, and graduate degrees. The borrower can get a chance to get many other loans when they want to. The loan terms of this lender are 5 to 15 years, with a loan amount of about $1000 to $350,000. You can also save some money because you will not be charged application, origination, or disbursement fees. Repayments are made when you are still in school or out of school. While in school, you can make a full or interest-only payment.
Advantages of this company
- The company offers different types of loans for each year, meaning that once you are in and approved, you can access funding for the subsequent years without having to go through credit checks every year.
- Students who have accounts with Citizens Bank can sign up for auto payments with a reduced rate of up to 0.5%
Discover
This platform offers personal loans for debt consolidation, improvement of homes, and major purchases—the terms of the loan range from three to seven years. Students can access loans such as law, undergraduate, graduate, dental, medical, and many others. The rates are fixed and sometimes can be variable depending on the type of loan one requests. The repayments time also differ with regards to the loan type. For instance, if you take up a consolidation loan, you get 20 years loan term. This platform also offers its customers discounts to lower the student loan interest rate by 0.25% while in the automatic payments enrollment. Students can also access an interest rate discount of about 0.35% if they use the interest-only repayment option and make payments when they are in school.
Features
- Students can access loans as small as $1000Â The platforms accept Co-signers
- The company has no origination late or application fees
- Consolidation makes sense when you are in conditions such as;
- You are having difficulties making payments- Consolidation can help you in this case by lowering your interest and lengthening your repayment period. Also, you will have access to repayment plans, federal loans, and deferment, thus offering yourself a safety net.
- You are struggling to keep track of different loans- Consolidating means combining all your loans into a single loan to be paid monthly.
- You are planning to work in a profession that is eligible for loan forgiveness.
- You have a loan in default.
Consolidation loans are similar to refinancing a loan. You can choose to consolidate all, a part of it, or just one of your student loans. Most students use consolidation as a strategy to lower their monthly payments or to help them get out of default. Whether you have private or federal loans or both, choosing to consolidate them might help you reduce your debt, manage payments better and work towards financial stability. Too many student loans can affect your ability to save for retirement and the ability to qualify for other loans such as a mortgage.
The list above gives some of the companies you can consider consolidating your student loans. It is upon you to find the best company to work with and get rid of the many loans. Also, you can redeem your credit ratings by choosing to work with only a single or two loans instead of having to think of the many different loans you have.