As any current student will tell you, the cost of attending a decent university in the United States, whether public or private, is astronomical. In the past two decades, the cost of enrollment in college has increased at an alarming rate. Because of this, many students require financial assistance to help pay for their tuition, housing, and textbooks. More often than not, this assistance will come in the form of a subsidized or unsubsidized loan from the U. S. Department of Education. After four to five years, the final balance that a student owes to the government can be upwards of $20,000 and sometimes even reaching six-figures. Many college graduates turn to student loan consolidation to help them manage repayment of these government loans.



Student loan consolidation can be helpful for a variety of reasons. When a student graduates from school, they have six months before they must start paying on their loans. The amount due on each one is divided into monthly incremental payments to eventually pay off the balance of this loan. Unfortunately, this monthly payment can be unaffordable on the income of the average intern or entry-level worker. This is especially true when this monthly payment is combined with other monthly expenses such as credit cards, groceries, rent, car payments, and auto insurance.

Student loan consolidation can be beneficial to a new graduate because all of their student loans will be combined into one debt. This can be helpful in many ways. For one thing, it means that the student only has to keep track of one due date per month for his/her student loan payments. Additionally, student loan consolidation can result in a lower monthly payment amount. This can free up more of the former student's income so they can pay off other high interest debts or make large purchases towards their future.

Another benefit of student loan consolidation is that a consolidated student loan will have a fixed interest rate. Student loans granted through the US Government have variable interest rates that are likely to increase annually. The fixed rate of a student loan consolidation allows for better budget planning on the part of the graduate. A fixed interest rate is also likely to save him money in the long run as variable rates can be much higher.

One of the best features a student loan consolidation has is that it is easy to apply for and there are no additional fees to pay. Additionally, bad credit is not a factor in being approved.

Unlike other companies with debt consolidation programs, a consolidated student loan will not charge the borrower a prepayment penalty. This is a great feature for the graduate who may become financially successful in the future. He may be able to pay his debt quickly and save additional money in interest.

The application process should begin with a search for various lenders who offer this service. This is done so that the student can compare the interest rates and discounts offered by different lenders. Some lenders will offer bonuses to their new applicants. Commonly, lenders will offer a reduction in the fixed interest rate if the borrower utilizes electronic payments, pays their loan on time for a period of 12-24 months, or if the borrower is still in their initial default period.

The applications for student loan consolidations are generally easy to fill out. The traditional method of filling out the paperwork for a student loan consolidation is to receive the application via postal mail. However, most lenders now offer online applications to speed the process along. The same information is requested no matter how the application is completed.

It is important to note that the student loan consolidation application will require the applicant's social security number. This is not used for a credit check or to determine the applicant's consolidation package. This information is needed so that the lender may contact the U. S. Department of Education regarding your student loan balance.

Other information needed to complete the application may include the student's name, address, driver's license number, and two personal references. The financial information included in the application will refer to income from the previous tax year and current working situation. All totaled, this student loan consolidation approval process will last 40 - 60 days.

For those graduates who want a simple way to keep up with paying their student loan debt, a student loan consolidation may be the answer. There will be one loan amount, one interest rate, and one payment due date per month. As far as loan refinancing goes, it doesn't get any easier than that.