PRIVATE STUDENT LOAN CONSOLIDATION: A NEW HOPE

The latest research suggests that the 50% of the students will take minimum 10 years to pay off their student loan. The amount of student debt has increased 25% over last few years. Recent statistic shows that the amount of student debt is much bigger than the combination of credit card loans and auto loans. Some say it is the economy and others believe the cost of higher studies is increasing because more students are attending the courses.

Reasons Behind Student Debt

The global economic downturn in 2008 is one of major factor for the rise of student debt. The reputed banks of all over the world emptied their funds to help the students to pursue higher studies. They continued with this process as it generated more profit from the borrowers. But the economic recession turned the corporate world upside down. Most of the banks restricted their limits and many other disappeared from the market crushing the fate of the borrowers. Millions and millions of dollar is pending as more and more students are failing to get a decent job.

Trouble also broke out for the elders and co-signers as well. The heavy load of loans is a hardship for them. Their retired life enjoinment is silently fading away from them. The co-signers are about face lifetime debt crisis with literally no sign of help. The struggle to find a good job is frustrating for the aspiring students. The longer they wait the longer the burden remains.

Another important factor for the increased student debt is the rising cost of the tuition fees. It is impossible for the students to bear the cost in this crisis situation. This has led them to seek more financial benefits from other financial institutions. The financial help from other institutions add more miseries for them. One way, it doubled their debt and another way it made them bear the loan for the rest of their life.

Private Student Loan Consolidation

The private student loan consolidation has the ability to combine all different student loans into a single monthly payment. This important student loan repayment program helps to reduce the monthly payment and to stretch the duration of the payment. It is considered a great tool for the debtors. It designs the payment process simpler and brings down the interest rate. It is really vital for a lender to know the interest rate before going for consolidation. Sometimes the processing fees are charged at the beginning of the program.

Benefits of Consolidation

The borrowers generally enjoy three benefits from the consolidation package. The first benefit of consolidation is the merging of separate loans into a single new loan. The second benefit is to pay less interest by receiving a single consolidation plan where the new interest rate is lower than the original interest rate. The third benefit is to lower the monthly installment payment with a lower interest rate. In this stage the duration of the payment can be stretched.

How to Consolidate

The process of receiving a private student loan consolidation begins with filing an application to a bank or other financial institute. After getting the nod from the insurance companies, you are eligible to ask about its consolidation plans. The insurance company will further send an agent to your house to show you the consolidation plans. Here, it is important to check the different interest rate and the details of the program before finalizing the program as a repayment option. After gathering the adequate information you should be clear to choose the right consolidation program for yourself. This way you get the accurate choice to clear you loans.