Graduating? Consider student loan consolidation

It’s that time of the year again folks; the end of finals for the Class of [insert this year here]. If you’re part of the graduating class, you likely have your Commencement soon or have already taken the walk of glory to get your degree. Congratulations!

This post is devoted to you (yes, you!) to make sure that you start off your life as a degree holder right, with as little financial confusion or anxiety as possible. To get started, I recommend you take a second to read my blog post on exit counseling.

Once you have chosen your repayment plan, it is time to consider your current financial picture. Do you have a full-time job lined up already? If not, are you working part-time?

More than likely, you will have some sort of job when you graduate… so the question becomes one of how much can you afford in living expenses per month. Depending on the amount (and type) of loans you took out for school and the repayment plan you selected, the monthly payments may still be out of your reach by the end of your grace period.

Do I have any alternatives if I can’t afford my payments? Absolutely. A student loan consolidation can significantly reduce your monthly payments at the expense of lengthening the repayment term for your loans. For federal loans, if you selected the “extended repayment plan”, this won’t really apply to you. Where consolidation really shines is private student loans.

Depending on your credit (or with the help of a creditworthy co-signer), a private student loan consolidation can net you an excellent variable interest rate with a longer repayment plan. The result: lower monthly payments, but more interest paid overall.

Although this trade-off might leave you wondering which is the lesser of the two evils, I say with certainty (being extremely familiar with the process and how personal finance works) that it is in your best interest to be able to make your monthly payments consistently every month instead of letting any of your loans go delinquent or even drop into default. The latter will do nothing but destroy your credit and leave you in a tough situation for years.

4 Great Uses for a Private Student Loan

When it comes to private student loans, many potential borrowers believe they only can be used on tuition. Thankfully, this assumption is false. In reality, a private student loan is a very flexible lending option that allows you to take out as much money as you need (based on creditworthiness) to cover expenses that federal products or scholarships may leave behind. Let’s take a look at some uses for a private student loan:

1) Books

Textbooks are extremely expensive, to put it mildly. On an average semester, I paid anywhere between $300-450 on textbooks for a five class load. I graduated this past year, so those numbers are current… in case you were wondering. This number can sometimes be reduced if you purchase used books online or rent them, but not all titles are available consistently.

2) Apartment Rent

If you live off-campus, finding the money to pay the rent, utilities, food costs etc. can be a struggle while you are in school. During my time at college, my average rent was in the $550/month region (in Boston, MA), utilities averaged about $60/month, and I spent $60-80/week on food/groceries. That rent figure is based off living with multiple roommates; if I lived by myself, it would be more like $1100-1300/month.

Obviously, these numbers are a little overwhelming if you are trying to work during the school year and pay down at least some of your school costs. A private student loan can be useful in this situation by taking care of a large part of the costs, or all of them, depending on how much money you elect to borrow. I generally took out a $5,000 private student loan per year to cut down what I had to pay out of pocket on my rent to a much more manageable number.

3) Study Abroad

If you haven’t had a chance to read my blog on study abroad financing, I definitely would recommend it. It gives a couple little tips that make planning for the trip much easier and takes the stress off.

4) Clothing / Shopping Necessities

This may sound like a throw-away point, but it really isn’t. If you go to school in a climate that is dissimilar from what you are used to, buying clothes is inevitable. A few of my friends in various classes came to Boston to study from a variety of places such as California, the Dominican Republic, and Mexico. A month after arriving and settling in, they all had to work overtime at their jobs to save up money or beg their parents to send them some funds to buy Fall / Winter clothes due to Boston’s rather frigid climate.

There are other necessities you may not think of too. If you wear contact lenses, those are not cheap to buy when you need extra boxes. If you get sick, prescription medication and/or doctors fees may be more than you can afford to pay out of pocket. These are the types of unexpected expenses that pop up when you are in school, and having the extra cash available to you is extremely valuable and a frustration saver.

Student Loan Consolidation Success

Direct Loan Consolidation Guide For Students

Direct loan consolidation aims to simplify the headache students face with the lamentable amount of school allowance along with the increment of the federal student loan. This type of student loan consolidation greatly reduces the hassle students go through educational funding.

If you find that your student loan repayment is requiring full use of your budget or finances putting your credit rating in the red, a direct loan consolidation should help you to turn your financial situation around.

Direct loan consolidation is one of the means of reducing students loans. It is readily available for all students in this country. You can seeking out this category of student loans consolidation by searching online for favorable student loan firms.

As a student a direct loan consolidation makes it possible for you to convert your undischarged student loans of high-priced interest rates with a manageable, fixed interest rate loan.

Invariably a direct loan consolidation is the answer to your educational finances in respects of your grueling monthly repayments, because it practically helps with options for the deferment of your current loans repayments, To initiate a direct loan consolidation is to get a breathing space from financial burdens as you struggle with you education.

Aside from deferment options this type of debt consolidation offers you the opportunity to get at lower interest rates of up to 0.6%, It all about consolidating your student loans under a new loan, allowing it to be shown on your credit report as settle to improve your credit score in black.

However, while the direct loan consolidation is considered the best means of accessing manageable student loans, bear in mind that it is only useful if you are a fresh student. There is no sense in taking up a direct consolidation loan if you are about leaving school.

Direct loan consolidation is meant to expand the time frame you are required to pay off your debts with reduced repayment amounts each month, which, after all increases the total sum of of your loan at the end.

If you would want a better deal on your student loans go ahead and use a direct loan consolidation to manage your student loans now and lower the interest rates on your education finances.