According to NBC News, over 44.7 million Americans have student loan debt. If you’re one of those 44.7 million, then you might be looking for easier and faster ways to pay off your debt.
You’re not alone. One of the biggest stressors for millennials is having to repay back their student loans. It’s a nagging presence that can’t be ignored and something that most people strive to pay off as fast as possible. One of the best ways to pay back your student loans is to consolidate them. This means taking out a larger loan to pay off your smaller loans. So instead of paying back many small loans, you’ll pay off one large one.
Before consolidating your loan, make sure you research the differing interest rates to make sure you don’t pay more than you would have. There are some benefits to consolidating your student loans with Direct Loan Consolidation, and we’ll touch upon the main reasons why.
Gain more time to repay your student debt
If you’re having trouble paying back your student loans because of financial issues, then consider consolidation. By paying them off with one large loan, you’ll gain more time to repay your student debt. Unfortunately, this may end up costing you more in the long run. The DLC Program can extend loan payment by 10-30 years, giving you more time to repay your debt. Another benefit is that you may get lower interest rates, which will help you make payments in your budget bracket.
You can set up an automatic debit to pay for the DLC every month. This is especially handy if you’ve been having trouble paying back multiple debts and cannot keep up with payments on time. Additionally, there’s no minimum qualification or maximum amount for consolidation, so it’s very lenient in terms of payment.
Take charge of your budget
You can also lower the amount due each month to help your budget. This is helpful if you’re having trouble making payments on time and will help prevent loan default. If you still end up with default, this will negatively impact your credit score for several years.
Simpler payment process
Instead of having to make payments on multiple loans, you’ll be able to pay off only one loan. This will simplify the payment process. This is especially helpful if your loans are from multiple lenders, all with different rates and payment due dates.
Switch from a Variable Loan to a Fixed Rate Loan
By consolidating your student loans, you’ll switch to a fixed rate loan. This will ensure that there is no increase in interest on your student loan and that there will be a fixed payment rate.
Based on your personal student loan debt and personal preferences, you might want to consider merging your loans. When properly done and with correct research, this may end up saving you money in the long run.
Although, like anything, it comes with its downsides. For starters, you may end up paying more interest in the long run. You’ll also lose benefits like the Public Service Loan Forgiveness, and you won’t have lender benefits like reduced interest rates. But if you’re having trouble making your monthly payments on time and keeping track of your loans, then you should consider consolidation.