By the time they graduate, many students accumulate a significant amount of loan that needs to be paid back. These could be Federal or private loans. If you are saddled with huge student loans, consider debt consolidation for a better control over your finances. With some judicious planning and research, you can consolidate all your debts into a single loan at a reasonable rate of interest, giving you significant savings.
Federal loans can be refinanced with a single fixed rate federal loan. This refinancing option has several advantages. You get zero application charges and a 0.6% waiver on the interest rate if you consolidate within the grace period. If you want to make extra payments to pay off the loan quickly, you can do so without any prepayment penalties. Remember that you cannot use a private loan to consolidate your federal student loans.
Refinancing your loans with one consolidated loan in a low interest scenario like the present can give you huge savings. Whatever be the kind of loan you have taken, you need to find the right debt consolidation loan to tackle the outstanding payments. Ask lenders about the costs of the new loan. If the charges and fees seem high, look for other lenders. Avoid loans with pre payment penalties so that you can pay off the debt before the term if possible. The idea is to become debt free and financially secure as soon as possible.
