Consolidate Student Loan Debt: A Student Loan Debtor's Perfect Solution

Anyone who has been in a situation of trying to get from under debt probably knows there is no “perfect” solution to that dilemma any more than there is a perfect solution to a student loan debtor’s dilemma. The best that can be hoped for is to find a consolidation loan that will allow the former student to enjoy a standard of life based on his or her degree and still be able to repay the numerous student loans that were required to finance that education.

That being said, you need to understand the term “student loan consolidation,” which, like any other consolidation, means you take your debt and combine it into one, lower, easy monthly payment. The difference is that only student loans are qualified for a student loan consolidation; that means you can’t pay off your credit cards, car, or furniture with a student loan consolidation.

Several different programs exist that allow students to consolidate student loans, but the best seems to be the Federal Student Loan Consolidation program. First, it has the lowest interest, varying from 1.5% to approximately 4.5% with payment terms of ten to twenty years. Depending on the amount of loans you have outstanding, taking a Federal Student Loan Consolidation can reduce your payments as much as 50% a month. Additionally, these loans do not require income verification or credit reports, so those who have just begun a new job or will soon and have bad or no-credit still qualify to consolidate their student loans.

Of course, there are other student loan consolidation programs available including the Direct Student Loan Consolidation, which requires a borrower to have at least one Direct Student Loan, a verifiable income, and no adverse credit to qualify. Another type is the Private Student Loan Consolidation, which, though not as attractive as the Federal Student Loan Consolidation, is feasible for the former student who is set in a job and has a means of support. These loans run for up to twenty, sometimes thirty years, depending on the lender. Though a somewhat higher interest rate averaging from 6-10%, they are still more attractive than the average consumer loan and allow the borrower to get from under his or her student loans and begin life as a tax-paying citizen.

A student just graduating from college feels overwhelmed, wondering how he is ever going to have any kind of a life with the payments on those student loans hanging over his head. Student Loan Consolidation Loans help ease the stress and worry over those loans and gives the student a chance to begin his new life within the scope of his chosen field. It means he or she can buy a car, rent an apartment or buy a house, and obtain financing for furniture and still be able to afford to make payments on all of those student loans. It may be a little difficult at first until the expected income starts coming in, but at least there is a future that will allow much of the stress to be lifted.

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