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Tuesday, September 22, 2009

The Benefits of Consolidation Your Student Loans

There are many benefits to consolidating student loans. Receiving a lower monthly payment is perhaps the best reason to consolidate your loans. Other benefits include saving money by paying interest on one loan instead of two or three, extended loan repayment terms, and a lower interest rate.

If you are living on a tight income, you may qualify for a repayment plan that will start out lower and gradually increase over the time of the loan. Payments are considered graduated payments because they will increase a little over time. You may also qualify for longer loan terms. When you consolidate student loans, you will be eligible for these programs. This is another benefit to loan consolidation. If you do not consolidate your student loans, you may not be able to make graduated monthly payments.

Saving money and earning a lower interest rate are the biggest benefits to consolidating your loans. You will have the convenience of making one payment each month, which will be easier to remember, you will receive a lower interest rate, and you will be able to build your credit score by making these payments on time each month. This will come in handy when you are ready to buy a new car or a home.


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