subject: Student Loan Consolidation - Can it be Refinanced? [print this page] Student Loan Consolidation - Can it be Refinanced?
There is a common belief that student loan consolidation is the same as refinance student loan. Let me just correct you on this one: this is not true. When you opt for student loan refinancing, the loan agency often requires you to make payment which will be considered either as an early settlement fee or a processing fee. However, if you go for student loan consolidation, you don't have to make these payments.
Let's discuss that more specifically:
Student loan consolidation simply means that all your student loans are combined into one single account or loan. Obviously, when all your loans are combined, then you would have to make only one monthly payment and take advantage of a lower interest rate.
This is a pretty logical option because imagine having three student loans and you would have to pay each monthly premium with current market rates. You cannot afford not to pay for your student loan because you owe the agency the money but if the loan agency will combine all your loans into one and allow you to pay it in one monthly payment using a single rate based on current market prices, then that's more beneficial to you, right?
A lot of loan agency will tell you that you can save at least a thousand dollars if you consolidate your student loans. Imagine having a thousand dollars in your pocket right now. Don't you think you should really look into this option?
Consolidated loans cannot be refinanced. Refinance student loan consolidation is not a viable option. Obviously, loan consolidation can be done only once. You can consolidate more than two loans in one student loan consolidation account but you can't have it refinanced on its own.
If you check into student loan consolidation, you can also significantly improve your credit standing. Consolidating your student loan will simply reflect that you are taking responsibility with your loan and you are reliable enough to deal with your debt despite any default payments you've probably had. When you apply for a student loan consolidation, then your credit record will show that you have already paid your previous loans which will reflect a good credit standing.
So if you currently have student loans and you're considering to refinance over student loan consolidation, this may have to weigh out the differences and the benefits before you jump into the bandwagon.
