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Real Life Debt Solutions With College Loan Consolidation



Most people probably go through college without ever knowing how expensive their education is - until they are slapped with the billing notice for the first payment on their student loan. And then it comes. The dawning of the real world: they have to get a job to pay the bills. Then comes another flash sign: college loan consolidation.

There are private student loans and there are federal student loans. Whatever type of loan or loans you had to pay for your education, these are loans that you need to repay. For recently graduated students struggling to find a high paying job, paying multiple education loans can be overwhelming. It does not help that defaulting on the payment of their loans can get them marked as a person with a bad credit history by the credit bureaux, making it very difficult for them to access additional credit.

A loan consolidation presents a very real chance for student loan debtors to pay for their college loans. What it does is to combine all your college loans into one single debt account and thus, all the payments are paid for through one payment each month.

There are many college loan consolidation companies mushrooming on the Internet today, and it pays to compare interest rates and loan terms. The single monthly payments under college loan consolidation programs are always lower than the total monthly payables on unconsolidated loans. This is made possible through a longer payment term than your typical college loan - from 10 to 30 years.

With some providers you can reduce your monthly payments by as much as 53% with a federal student loan consolidation while for private loan consolidation, interest rates are reduced if you pay on time or if you pay through an automatic system like an auto-debit system.

You cannot consolidate federal loans and private education loans through one loan consolidation program. If you have outstanding federal educational loans alongside private education loans, you need put them under separate consolidation loan programs: federal college consolidation loans and private college consolidation loans.

With some providers of federal college loan consolidation programs, the terms are more forgiving under certain conditions. You can actually get some percentage off the interest rate if you set up an automatic debit system for payment (some providers offer a .25% reduction in interest rates). On the other hand, you will not be eligible for a private college loan consolidation if your debts do not total at least $7,500.

If you do the math properly, you will find that you will actually end up paying more for your college loan when you consolidate them, precisely because of the longer payment term and the interest rates. However, if you do not consolidate your loans under a college loan consolidation program, you will have to labor with contacting your creditors and talking to them one by one for more favorable terms of payment. And you might not have the necessary negotiating skill to tip some terms in your favor.

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