Consolidating Your Student Loans
Student loans can be difficult to cope with once you have graduated from college. When the economy is doing poorly, it can be quite difficult to find employment, making paying off your student loans extremely difficult. One way to ease this process of debt repayment is to consolidate your student loans. This process can allow you to reduce your interest rates, simplify your payments and lengthen your repayment term.
Deciding if Consolidation Is Right for You
While there are many advantages to consolidating your student loans, it still may not be the best course of action for some people. Each situation is different, and if you have a combination of federal and private student loans, you may be facing very complicated issues associated with your consolidation plan. These two types of loans cannot be combined.
Federal loans, as well, are based upon fixed interest rates, which eliminates any chance of capitalizing on a low rate through consolidation. Debtors can still gain the benefit of only having to write out one monthly check through federal loan consolidation, but they cannot lock in a lower interest rate.
Finally, if you have the money to pay off your debts, then consolidating them into a single, longer-term loan can actually add significant costs to your plan. The extra interest you will pay over the years can add up to be several thousand dollars of extra money owed.
However, if you need lower monthly payments or are having trouble keeping track of your loans, then consolidation may be the solution for you.
If you would like to learn more about consolidating your student loans, or if you are considering filing for bankruptcy, then Birmingham bankruptcy lawyer Paula Greenway can help. Contact our offices today by calling (205) 324-4000.