Five Drawbacks for Student Loan Consolidation
- Author Brent M. Barnhart
- Published August 19, 2010
- Word count 452
Before a Student Loan Consolidation, Consider These Five Drawbacks
When considering student loan consolidation, there are a number of variables to consider. The process has both its advantages and disadvantages, all which should be reviewed before jumping into consolidation. The following list contains five potential drawbacks of student loans that students should be familiar with to get some help with debt.
Fixed Interest Rate
When consolidating student loans, you're automatically given a fixed interest rate. This could be seen as either an advantage of disadvantage. It's an advantage in the sense that your rate never goes up, yet puts you at a disadvantage when variable rates drop. Fortunately, such drops won't have a huge financial impact on those paying back their loans, but should still be considered.
Discharge and Deferment Benefits
Certain loan programs provide discharge benefits which provide you with money after graduation. This money is used to pay off the loan. Deferment allows you to delay payments on a loan until the loan ends, and sometimes these benefits won't remain after consolidation. Therefore you may want to reconsider consolidation so that you can retain these benefits. A viable option would be to leave these loans out of the consolidation process.
Loss of the Grace Period
After graduating, you normally have a six-month grace period in which you don't have to make loan payments. The idea of this period is to give you an opportunity to find work and relocate if necessary. Consolidating your loans too early causes you to potentially lose this period. That's not to say, however, that you should completely avoid consolidating during that time. If you consolidate during the grace period you have the potential to get a 0.5% interest discount on your new loan. This is a great way to save some money.
Payment Schedule
Be sure to make a payment schedule that isn't too long but still remains realistic. Stretching out payments causes your loan take longer to pay off, which in turn means paying even more interest. This is probably one of the most common ways that those in the student loan debt consolidation business capitalize on those who don't know any better. Be smart about your schedule and pay it off as quickly if you realistically can.
Eliminating Loans
Without consolidation you pay off your loans one by one, meaning that when a loan's gone it's gone forever. When you see your loans consolidate, however, they're all lumped together. Therefore you'll continue paying until it's all gone. This is a serious point to consider for those paying off their debt.
In the end, it's your choice entirely. Weigh the advantages against the drawbacks and determine if loan consolidation is the right path for you.
To Learn More Information About Secure Loan Consolidation and To Apply Today Visit Us At ==> http://www.secureloanconsolidation.com
Article source: https://articlebiz.comRate article
Article comments
There are no posted comments.
Related articles
- Guaranteed Auto Financing
- Elevate Your Business with Top-Quality Printing Equipment from Finance@work Pty Ltd
- BNPL vs Traditional Lending: Which Is the Better Option for Today’s Consumers?
- Can Getting a Loan Affect my Personal Credit Score?
- Personalized Loans 5 Things you Should Consider Before Applying
- Best Credit Card for Cash Back on Gas: Fuel Your Savings
- Mwananchi Credit Highlights The importance of Teaching Financial Literacy In Schools
- Porchlio's Rent Affordability Calculator: Your Key to Smart Renting
- What is SMB Funding?
- Cash USA | Quick & Easy Loans
- How Can a Private Loan Help Your Cash Flow Situation
- Business Line of Credit: A Lifeline of Your Financial Needs!
- Unsecured Small Business Loans in Australia
- Working Capital Loans: Everything you Need to Know
- Small Business Cash Advance Loans - Fast and Easy
- Things Not to Do When Building Business Credit
- Why Small Business Loans Do not Get Approved
- How to File Great West Life Benefit insurance Claim
- My encounter with the heartless corporate America @ChaseBank
- Are low doc home loans still available in Australia?
- Think Due Diligence Before Acknowledging That Loan Offer
- Tie Up Your Financial Loose Ends! The Importance of Managing High-Interest Loans
- Understanding cash flow vs. asset-based business lending
- Debt Consolidation Loan or Debt Counselling in South Africa
- Credit cards with bad credit wired to a prepaid debit card
- Insurance Financial Producers Articles - A Superstar Success Story Cannot Teach Me Anything
- Three Quick Tips From the Canada Revenue Agency on Tax Filing
- How Crypto Loans Work
- 4 Reasons why it is Beneficial to make a Down Payment for your Car
- Is the Process of Buying a Car Worth your Time?