LetsLearnFinance

STUDENT LOAN CONSOLIDATION

Loan is a financial package offered to borrower from lender with a mutual or written agreement with specified terms and conditions for some fixed tenure with an expected repayment and is usually borne with an interest. We may say that loan refers to consuming or using future purchasing power in present. Student loan is a structured package meant for students to finance their educational expenses.

Even after flexible loan plans, several students fall in debt trap due to over expenses and unplanned spending. In this scenario it is often advisable to manage the loan by consolidating it in a judicial way. While maintaining numerable loan repayment liabilities

which accounts to maintaining that much interest repayment trouble, maintaining records of all at the same time, it is better to transfer them into one consolidated structure and start repaying them through one. Often this helps to negotiate interest rate changes in a good way and acts as buffer during hard pressed times of high interest rates.

Students who often take care of their finances during their educational period may find this extremely time consuming as well as deviator from their daily chores.

According to 2002 statistical data, students on an average left college with $17,000 in loan debt. With loan amount steadily increasing in the last few years, the US Department of Education and other higher-education institutions have entered into a contract with private collection agencies to collect overdue student loans.

It is always advisable to understand the loan regulations, clauses, interest rates, repayment possibilities before taking a loan and to counter any for-coming financial crisis

or any unforced errors certain steps are perennially advised:-

• Savings: Just $20 every month savings can create wonder, by the end of college, one will have almost $1,000 saved for student loans. Hence a small but regular savings can do wonder.
• Budgeting: Many college graduates exceed their cost of living; hence it is often suggested for developing a budget and sticking to it. Determine what bills and payments have to be paid (i.e. student loans, rent) and then calculate how much is left over for additional expenses and as savings.
• Ask for advice: One shouldn’t hesitate to ask student loan counselor or collector for a flexible payment plan. Many organizations are willing to develop a payment schedule that works for both the consumer and lender.

Student loan debt consolidation program can only work, if he / she introspects his / her financial standing and work out his / her repayment program accordingly.

Thanks

Pamela