Student loan refinancing and their consolidation
Sometimes it so happens that, in order to support your daughter’s or son’s education further you have to take loans from financial institutions but somehow due to some reasons you find that it is becoming too difficult to cope with the rates of interest in clearing the loan. Then what do you do under such circumstances? The best thing that you can do under such circumstances is to take a new loan at a new rate of interest in order to clear off the previous education loan a little more easily.
Private consolidation loan
Here in this private student loan, you are able to refinance and combine the various education loans under one fresh loan that has a new rate of interest. It also brings you a fresh new term of the amount for making the monthly payments and repayment as well. This helps you to lower the monthly payment on your loan making it less burdensome for you than before. In case you try to extend the term of your repayment then, in that case, it may bring an increase in the total cost of your loan as the term gets extended further.
Consolidation of the student loans
The thing that you shall find here is that as you refinance your student loans, you are in a position to put more money into your budget. So, this indeed works as a great advantage and help. Now the thing to understand over here is that there are two options to this, one is the fixed rates and the other is the variable rates. Under the fixed rate it is 4.99% – 9.49% APR. And in the variable rates, it is 5.49% -9.49% APR. The creditworthy applicants who choose the shorter term for repayment, it is to them the lowest APRs are applicable.
The consolidation of the federal and private students loans
Have you ever given thought to what happens when you consolidate private and student loans? In doing so the following things take place:
• Your rate of interest gets lowered
• The monthly payments on your student loan get lowered
• Things get simplified for you having one monthly payment to make on one lone only
You certainly shall get various options for student loan refinancing but indeed you got to check carefully if it is the right mix of consolidation for you. There are many genuine financial institutions that cover your student loans and one of them is Discover. If you do it taking the help of Discover then, there shall be no origination, application, or the stress of late fees as well. During the enrolment of the automatic payments, you shall be getting a rate of reduction on the interest of 0.25%. and very easily you shall even be able to consolidate your private student loans and federal loans too.
How Discover makes the consolidation of the student loan easier.
You can apply very easily from the smartphone or the computer. Then choose your own variable or fixed rate of interest. Then they shall verify with you the status of the current loan. And then all is left for you to sign the documents and they shall mail you the loan term.
How to know if the student loan consolidation is the appropriate one for you
Potential benefits
• Lower monthly payments
• Rate of interest is less
• Simplified processes for monthly payments
• You can apply on your own
Other considerations
• You shall be getting the option of choosing between the variable and the fixed rate of interest. In case you happen to choose the fixed rate of loans and are looking forward to refinancing it to the variable consolidation then, in that case, you shall still receive a lower rate of interest but your interest shall change if the index changes.
• Consolidating your student loan shall also make it a lower monthly payment mode for you or can even extend the repayment term of yours too. But it must also be remembered that it shall take you much longer to repay back the loan in that case and that shall also bring an increase in your total cost of the loan too. in order to bring a reduction in the cost of borrowing, you shall be able to make the additional payments without having to pay the penalty.
• You have the choice for consolidation of your student and federal loan into one loan making it a monthly payable mode.
• When you consolidate your student federal loan, all the benefits and features that you are enjoying in it shall not be applicable to your new consolidated loan. So, before you consolidate your loans and the payment systems, it is important that you consider every aspect carefully before deciding. Once you consolidate your existing loan all the features in it shall automatically turn nonapplicable on your new consolidation.
• On your own you have to qualify yourself for the loan consolidation. Choosing a creditworthy cosigner shall make you get a much lower rate of interest.
• If you happen to choose consolidated loans having a cosigner then in such a situation, the cosigner shall not be responsible on the loans that have been included within your new loan consolidation.
Resources of consolidation for parents and students
The fixed interest rate is ascertained at the beginning itself when you are applying and never changes when the loan is on, until the time you are no more eligible for discounts. The corresponding APR and the variable rate of interest may even get increased while the loan is still running. This in turn may also lead to an increase in the monthly payment mode too. if a student fails to have an established history of credit, then it may be difficult for him to qualify for a student loan and even to enjoy the support of the lowest rate advertised. So it is very important that the borrowings are made responsibly and before one chooses to shift the mode of consolidation on his loans, he got to think about all the pros and cons associated with it too before coming to a decision.
