Student Loan Consolidation Program – The Options For Paying Off Student Loans
Federal education loans have become a way of life for millions of students, so has the student loan consolidation program to pay off the various loans that a student avails. Education loans are no longer considered to be a burden. They are now seen as an inevitable necessity owing to the high cost of education. Similarly, student loan consolidation program is not thought to be only meant for those students who are financially weak or incapable of paying off the loans. Rather student debt consolidation is seen as an excellent way of simplifying the repayment of education loans. And it is seen as a prudent way of saving significant sums of money in terms of interest.
Rising popularity of the student loan consolidation program coupled with federal support has resulted in student loan consolidation companies, offering a lot of attractive features. The interest rates on consolidated loans are always on the lower side. Apart from this, they also proffer varied options for repaying the consolidations so as to make them suit the varied needs of customers / students. Let’s look at these options in detail.
The Options For Repaying Loans
The first option is obviously the ‘standard payment’ of fixed monthly installments. You may go for this option if you are confident of getting a job encompassing decent remuneration right away. Even if you do get a job that pays you well, remember to consider the possibilities of you losing the job for some reason like change in company policy or taking a sabbatical from work in near future.
The second option is ‘graduated payment plan’. As per this option, the initial loan payments are kept low to give you some breathing time. You can use this initial period to settle other bills or pay the installments of short-term loan like car loans. If it’s likely to take some time after graduation before you find a decent job that pays you really well, then this is the best option for you. After you get a good job and initial period is over, you can commence paying off the loan in normal installments.
The third option is a ‘variable plan’. According to this plan, the amount of installments is adjusted as per fluctuations in your income and expenses. This option is excellent if you have the kind of new job or business that involves uncertainty of monthly income.
The fourth option is ‘extended payment plan’. While exercising this option, you should try not to extend the payment plan for too long a period. It should only be done if you are likely to have a moderate source of income for a long period of time. Otherwise, extending the payment period for too long usually makes you pay more money as interest on the loan than you would have paid on your original loans.
If you wish to choose the kind of payment option and other conditions that best suit your case, remember to go in for student loan debt counseling. It will certainly help you to choose the best student loan consolidation program.
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