How to Consolidate Student Loans in 5 Steps
So you went to college, worked hard, and got a great job. Congratulations on your awesome achievements! But after the honeymoon phase of all the excitement wears off, you may be finding yourself looking at your student loans thinking, “Was college really worth it?” We all know you had a blast and got a great education, but it just seems like the bills are rolling in faster than you can handle. If only you didn’t have student loans all of your financial woes would be settled. Welcome to the “real world”, am I right?
The good news is that you are not the only one struggling with the problem of large student loan debts. Although you can’t just snap your fingers to make them disappear, there are ways to help lessen the financial strain from month to month. Learn the necessary steps to consolidate student loan debt to decrease your monthly payment and enjoy the start to your career with less headache.
- Take an inventory of all of your student loan debt. When compiling your debt you will need to take note of the amount of money you owe, who you owe the money to, and the interest rates on EACH loan. Many people don’t realize that they have a combination of loans. In some cases you may have both federal and private student loans. One really easy way to compile this information in one place is to use my.lendingtree.com. This platform will not only show you your credit score but it will also find all of the debt you owe, the interest rates on those debts, and the lenders that you owe monies to.
- Determine if consolidating debt is right for you. How much are the total payments each month? Are you able to afford these payments? Are any of your payments delinquent or in default status? If you are unable to make the payments, are missing payments, or are defaulting on payments, you are probably an ideal candidate for consolidating your student loans. (Note: Neglecting your student loan payments to go out every night with friends doesn’t qualify as not being able to afford the payments!)
- Educate yourself on the pros and cons of debt consolidation. The pros of consolidating debt is that you are able to make one lower monthly payment, that may be much more manageable, to a single lender. The cons of consolidating your student loan debt is that the duration of your payments may occur over a longer period of time. This may cause you to actually pay more in total. In addition to paying more, there may also be additional fees tacked onto your loan balance depending on the loan type and the lender.
- Shop for the best student loan debt consolidation deal. Make sure you spend some time shopping around to get the best loan type for you. You will want to take the interest rate, loan duration, and the total amount owed to the lender into consideration when you are shopping for a loan. (Pro tip: my.lendingtree.com can help you with this as its brain will help you determine the best consolidation loan type for you. That’s right, it has a financial BRAIN! And a smart one at that.)
- Consolidate your student loan debt. Make sure that you understand the full gamut of the consolidation loan you are taking out. Now you are on your way to a lower monthly payment and lessening your financial strain!