Many people, at one time or another, choose to consolidate their federal student loans from college. Sometimes they choose to do so because it saves them money; other times, consolidating actually causes them to pay more money in interest over the life of the loan. Why would they do it if it ends up costing more? Because of the flexibility of repayment plans offered through government student loans consolidation.
Let's say that you're a fresh graduate struggling to make ends meet. Your biggest concern is probably how to make this month's payment. The repayment terms set by the original lender aren't working with your current financial situation. So you look into consolidating your government loans to get a better repayment schedule.
Of course you can stick with the standard ten-year repayment plan after you consolidate, but you don't have to. You can extend the life of the loan out to as much as 30 years. With an extended repayment plan you end up paying more in interest, but it drives your monthly payments way down. This can be a breath of fresh air for a new graduate who may be living paycheck to paycheck already.
Graduated repayment is another option. With this plan, you start off with a very low monthly payment that gradually increases every two years. The reasoning behind this is that you're going to be the most strapped for cash when you're just starting in your career. Ten years down the road, when you're more established, you probably won't have trouble making larger payments. Many graduates choose this option.
Depending on the type of federal loan you carry, you may also qualify for income-based payment plans that require a certain percentage of your income every month. The three major ones are the income-contingent repayment plan, the income-sensitive repayment plan, and the income-based repayment plan. Again, your government loans may or may not be able to be consolidated with these repayment options depending on where they came from.
There are a few things you should know about repaying your federal consolidation loan in general. First, you can switch to a different repayment plan once a year if you want. You do not have to stick with the same one you chose 15 years ago when you first consolidated. Second, you cannot be penalized for paying more than the monthly minimum or repaying the balance early with government loans.
If you've gotten federal loans to help you through school, you're really in pretty good shape when it comes to consolidation. The government wants students to get a higher education to keep the economy growing, so they offer more generous terms to people who consolidate them. They offer more flexible repayment plans and lower monthly minimums than private student loans, and even will forgive balances up to a certain amount after so many years or on certain conditions. Check out an online repayment calculator to compare repayment plans.
People frustrated with their student loans' set payment schedule should definitely look into government student loans consolidation. It offers them more freedom and flexibility when choosing a repayment plan, and allows them to lower their monthly payments. The government is willing to work with you to resolve your student loan debt in a way that works for you through consolidation.
Let's say that you're a fresh graduate struggling to make ends meet. Your biggest concern is probably how to make this month's payment. The repayment terms set by the original lender aren't working with your current financial situation. So you look into consolidating your government loans to get a better repayment schedule.
Of course you can stick with the standard ten-year repayment plan after you consolidate, but you don't have to. You can extend the life of the loan out to as much as 30 years. With an extended repayment plan you end up paying more in interest, but it drives your monthly payments way down. This can be a breath of fresh air for a new graduate who may be living paycheck to paycheck already.
Graduated repayment is another option. With this plan, you start off with a very low monthly payment that gradually increases every two years. The reasoning behind this is that you're going to be the most strapped for cash when you're just starting in your career. Ten years down the road, when you're more established, you probably won't have trouble making larger payments. Many graduates choose this option.
Depending on the type of federal loan you carry, you may also qualify for income-based payment plans that require a certain percentage of your income every month. The three major ones are the income-contingent repayment plan, the income-sensitive repayment plan, and the income-based repayment plan. Again, your government loans may or may not be able to be consolidated with these repayment options depending on where they came from.
There are a few things you should know about repaying your federal consolidation loan in general. First, you can switch to a different repayment plan once a year if you want. You do not have to stick with the same one you chose 15 years ago when you first consolidated. Second, you cannot be penalized for paying more than the monthly minimum or repaying the balance early with government loans.
If you've gotten federal loans to help you through school, you're really in pretty good shape when it comes to consolidation. The government wants students to get a higher education to keep the economy growing, so they offer more generous terms to people who consolidate them. They offer more flexible repayment plans and lower monthly minimums than private student loans, and even will forgive balances up to a certain amount after so many years or on certain conditions. Check out an online repayment calculator to compare repayment plans.
People frustrated with their student loans' set payment schedule should definitely look into government student loans consolidation. It offers them more freedom and flexibility when choosing a repayment plan, and allows them to lower their monthly payments. The government is willing to work with you to resolve your student loan debt in a way that works for you through consolidation.
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