Student loan consolidation - How to save money and pay less

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Pay Off Debt and then Get Rich
This is an article worth millions of dollars to anyone who reads and applies these things.

1. Pay off all your high interest debt. This means credit cards, high rate consolidation loans and any other type of expensive debt you have.

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Debt Problems - How to Reduce Credit Card Debt
Having a credit card or three can be a thrilling adventure: all of the sudden you have more cash available and can buy things that you otherwise couldn't afford. You understand that you need to pay your bills on time, pay the minimum payment every month, and that you can obtain cash advances. Yet, do you know what risks are involved in minimum payments and cash advances? Educate yourself to avoid ... Read debt consolidation article



Student loan consolidation - How to save money and pay less
Save Money, Pay Less, Spend More on What You Want? Sounds too good to be true, doesn't it? Well, if you'll spend a few minutes learning about student loan consolidation, you'll soon be armed with enough information to make some really good decisions and help you achieve all of the above, and more.

Student loans are available to students (and parents) in need of help with living costs while studying and working on a degree program. For many students, student loans are their largest source of cash and income (in some cases, their only source).

What often happens is students acquire multiple student loans, then begin to have cash flow problems, which leads to charges on one or more credit cards. These credit cards are typically issued with very high interest rates, often 18% or higher. This is a severely problematic financial trap, and a very tough way to get started in life for a young person who is still in school or just about to graduate. Too many students leave college with debt that weighs them down heavily, burdening their lives with debt that will haunt them for many years to come.

So, how does student loan consolidation work anyway? Students accumulate multiple loans from various lenders. This leads to multiple significant payments each month, arising from several loans with unfavorably high interest rates and overhead.

Loan consolidation allows students to combine multiple loans into a single instrument, one loan from a single lender, typically at a more favorable interest rate.

In effect, this is like refinancing a mortgage or credit card or other debt consolidation - multiple debts reduced to one. The balances of the original loans are paid off by the loan consolidation lender, and voila' - a single, lower payment! The results: lower monthly payments, less overhead costs for the same borrowed money, immediate cash flow to spend on more important items today, and less financial stress for the student (who is typically already under enough stress dealing with their degree program and other aspects of school life).

A student should seriously evaluate consolidating loans if the consolidated loan would result in a lower interest rate than the current student loans, and especially if the student is struggling to make multiple student loan repayments already.

Often times, the merged loan includes a more flexible set of repayment options, plus no charges, fees or prepayment penalties. In some cases, there may even be no pesky credit checks, loan collaterals or cosigners to deal with, as lenders have streamlined their processes in order to compete more effectively.

Student loan consolidation can reduce payments by up to 60 percent. Actual amount saved will depend upon the existing loan interest rates and the term of the original loans. Typical student loans are for a 10 year term.

When consolidating student loans, it's possible to refinance for up to 30 years (like a home mortgage). It's important that there be no prepayment penalties, since the student will likely want to pay these loans off much sooner, once their earning power has dramatically improved after graduating and they're progressing in a career which pays relatively well.

Of course, the longer the loan period, the higher the interest rate, lower the initial payments, which frees up precious cash flow when it's needed most - while the student is in school.

So, if a student has multiple loans, typically in excess of $7,500 total, there are many benefits a student consolidation loan. It's a great way to free up cash flow, pay less each month, and save money while in school.

Rick Braddy is an avid writer, Texas Holdem poker player, professional software developer and marketer. His loan consolidation review website provides students and parents with a wealth of free information and independent point of view on student loan consolidation, intended to help young people better finance and complete their educations.

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Credit card debt help - Your options

If you find yourself feeling overwhelmed by your credit card debt, it is time to take action. There is credit card debt help out there and you do have options available to you to help bring your credit card debt under control. Once you investigate the options open to you and determine what is best for your individual financial circumstances, you can make a solid debt reduction plan and be on your way to becoming debt free.

Do It Yourself

If you are only dealing with one or two credit card companies, you may want to consider discussing the problem directly with the credit card company or companies involved. You can try to negotiate a reduction in interest rates and an extended payment period. Make a budget and stick to it, being sure to make your highest interest debts your priority. You may want to enlist the assistance of one of the many free or low cost credit counseling programs available. A Credit Consolidation Program

If you don't feel confident in your negotiation skills or have a more complicated credit situation, a credit consolidation program may be just the right solution for you. For a fee, a credit consolidation program will take care of the negotiations for you, and in most cases arrive at an advantageous reduction of interest rates and a manageable payment schedule. You will make a single monthly payment to the consolidation company and they will take care of paying the individual creditors. You'll need to be careful, however, in choosing a debt consolidation program for credit card debt help. There are many predatory companies out there, more interested in pocketing your fees than in providing service.

A Credit Consolidation Loan

A credit consolidation loan proceeds in a similar fashion as a credit consolidation program, with the difference being that you take out a loan and pay your creditors immediately, repaying your lender with a monthly payment. Depending on the interest rates involved, this can be useful, even practical. It is also helpful if you need to extend the period of time that you will be making payments, being unable to make the higher payments that would pay off the credit cards faster.

However, often you secure these loans using your house as collateral. Thus, you should give a great deal of thought to the matter before taking such a loan, being sure that the repayment schedule is doable. As with credit consolidation programs, you'll need to very careful of unscrupulous lenders. Research potential lenders well. Another thing to remember is to only borrow what you need, no more. In fact, if a lender encourages you to borrow more than you need, you should take that as a warning sign that you may be dealing with a predatory lender that is betting on profiting from your failure to repay the loan.

If you are ready to relieve yourself of the burden of credit card debt, there are credit card debt help options out there for you. Use caution and common sense in choosing the best option for you and you will soon be on your way to achieving your financial goals.

To view our list of recommended debt consolidation lenders online, visit this page: Recommended Debt Consolidation Companies.

Carrie Reeder is the owner of ABC Loan Guide, an informational website about various types of loans.


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Student loan consolidation - How to save money and pay less
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