Consolidate Student Loans To Avoid Bankruptcy
There are several types of debt in today’s society that is proving to me a millstone. Mortgages, credit cards, health bills, and student loans are the top four forms of credit that appear to be causing the most grief in our society. If any of these forms of credit are causing financial hardship, then there are several options you can consider. For student loans, rather than bankruptcy, you should consider a student loan debt consolidation.
Debt consolidation has its own pros and cons. One of the big pros is that it brings all your student loans together under the one bill. What is also important to note is that a consolidated student loan is, effectively, a new loan. Because of this, you can normally take the new loan for a longer period, this reducing the regular repayments.
When consolidating a student loan, you should ensure the lender is a sound reputable lender. The interest rate charged should be an average of the rates from each of the loans – over the term of the loan it generally works out to be the same. One of the biggest benefits to consolidating a student loan is that, unlike other loans, there are no costs (or should not be costs) associated with the transfer of loans into a single consolidated unit.
Who can consolidate a student loan? This is where it can get tricky. Either the former student or the parent can consolidate the loans. However, it cannot be done by both and it can only be done once. Student loans can only be consolidated once the education of the child has been completed and the repayments have started. You cannot consolidate at all while the student or parent is still receiving a loan.
It isn’t the right move for everyone, but if student loans are getting you down financially, consider consolidating them into one debt. It is certainly easier to manage one debt than three or four.
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