subject: Why Student Debt Consolidation May Be Right For You [print this page] Let's face it: education is expensiveLet's face it: education is expensive. But then, one can regard the cost of education as an investment towards getting ahead in your chosen field, so it is an expense that is often well worth the cost. To help you realize your dream, you can choose to apply for student loans. A student loan is a long-term, low-interest loan devised to aid college students pay for books, living expenses, and most of all, tuition---without asking for immediate repayment. Instead, the payment for a student loan is usually deferred for about six months to a year after the student creditor either graduates from or leaves college, but the specific terms vary from one student loan provider to another. Neat, right?
But like everything else, the job market has been badly affected by the global financial crisis, leaving many new college graduates jobless or underpaid. Sometimes, this situation is made difficult by the fact that they also have a lot of other debt on their backs, such as credit card debt. This means they are beginning their adult lives absolutely broke and desperate to dig themselves out of the financial hole they're in.
If you're one of these unfortunate students, don't be rash and file for bankruptcy, because this move will definitely not erase your student loans. What you can do instead is to explore other options for debt management, such as applying for student loan consolidation. Simply put, debt consolidation means taking out one huge loan to cover all your smaller, existing loans. Usually, a move like this means transforming your unsecured debt, which you obtained without putting down collateral, into secured debt, which means you now need to provide collateral. And the excellent news for you is that, unlike bankruptcy, it also works for unsecured debt such as student loans.
Not too sure about all this? Well, here are a couple of the advantages of applying for debt consolidation for student loans:
1. One monthly payment, one loan to pay them all off. - That sounds a bit like the One Ring in the Lord of the Rings series, but it's spot on---student loan consolidation means you no longer need to keep track of all the student loans you have. With all your student loans paid up, all you need to pay is the monthly fee for that one giant loan.
2. Possibly, but not guaranteed, smaller monthly payments. - Taking the time to look around for the best debt consolidation loan around can result in you paying about as much as the total of all your student loans, and in some cases, possibly even less. One of the reasons behind this is that debt consolidation typically offers low interest rates and longer payment terms.
