| Many people thought that student loan consolidation | | | | doesn't that option sound more logical? |
| and refinance are the same. The truth is, they are | | | | Many loan consolidators said that you can save a few |
| not. When you are going for refinancing, the loan | | | | thousand dollars by going for student loan |
| agencies usually will ask you to make a certain | | | | consolidation. Just think about what you can do with |
| payment either as early settlement penalty or as | | | | thousand of dollars in your pocket now. This is indeed |
| processing fee. But you are free from these kinds of | | | | an option you should spend time looking into. |
| payments when you consolidate your student loan. | | | | Do you know that you can also improve your credit |
| So, what is student loan consolidation exactly? | | | | score when you consolidate your outstanding loans? |
| Consolidating your student loan is simply combining all | | | | This is because your credit score reflects on your |
| your outstanding student loans into a single and new | | | | capability and reliability to dealing with debt. |
| loan. When you combine the loans together, you will | | | | Imagine that you are a banker who is responsible for |
| enjoy a single monthly payment, manage your loan | | | | loan approval and you are now looking at an approval |
| properly and most importantly, you can enjoy lower | | | | from someone with bad credit. Wouldn't you doubt |
| interest rate. | | | | the applicant's ability to repay the loan? |
| As you should of guess, interest rate plays an | | | | But by consolidating the various outstanding loans, |
| important role in your monthly repayment. Imagine | | | | the loan consolidator will pay off the loans and start a |
| that you have 3 outstanding loans with each of them | | | | fresh loan account with you. In other words, your |
| charging normal interest market rate. It does sound | | | | credit score will show that you have settled all your |
| fair for the loan institution to do so because you owe | | | | student loans. So, instead of holding 3 loans, you are |
| them money after all. But since you can earn lower | | | | now only servicing 1 loan hence the improvement of |
| interest rate by just consolidating all your loans, | | | | your credit score. |