Is Student Loan Debt Consolidation Right for You?
Do you have student loans?
If you went to college and took out loans, eventually you will have to pay them back. Even if you don’t finish college, you still have to pay them. A college education is important if you want to build a strong career earning a high salary. At the same time, college is not cheap. If your parents didn’t pay for school and you weren’t working at the same time, loans were the way to go.
How much do you owe in student loans?
If you owe less than $5,000 in loans, consider yourself lucky. While it still is a lot of money, and with the loan earning interest, it could take a while to pay off, at least you don’t have more. Some people go to college for 4 years costing $30,000 a year and pay for it all with loans. That leaves you with $120,000 in loans that will keep earning interest once you graduate. Unless you make a lot of money, this debt can be crippling.
If you have over $5,000 in student loans, consolidating them could be a huge help.
How many different loans do you have?
If you have one student loan, consolidating it makes no sense. In fact, doing so would go against the definition of the word ‘consolidate’. The more loans you have, the more consolidating them will help, especially if they have a wide variety of interest rates. You want to get rid of the high interest rates and get the entire debt under a lower interest rate.
When do you have to pay them?
Many student loans you won’t have to pay until you graduate. If you have to pay a minimum amount every month now, consolidating will help lower your monthly payment.