Posted: 15 Jun '18

Student Loan Debt Is It Time For A Debt Consolidation Loan

If you're finding it difficult to pay down your student loans, it may be time to consider debt consolidation. A deb consolidation loan is a type of refinancing that involves taking out a single loan to pay off multiple debts. Here's what you need to know about paying your student debt off with a debt consolidation loan.

Debt Consolidation Simplifies Your Finances

With a debt consolidation loan, you'll have one monthly payment to worry about instead of multiple credit accounts and loan terms to keep track of. Not only will this help you manage your monthly budget in a more efficient way, but it will also help you find room in your financial plan to make additional payments as your budget allows. And since additional monthly payments are applied to the principal amount of your debt, you'll find less of your money being eaten up in interest fees every month.

Debt Consolidation Lowers Your Interest

Taking out a debt consolidation loan means you'll be able to take advantage of a lower interest rate than you're currently paying on your individual student loans. While your credit history, credit score, and net income are important factors in securing the best rates, most banks and trust companies reserve their most attractive interest rates for debt consolidation loan products.

Debt Consolidation Gives You More Time to Pay Your Debt

Depending on the terms of your financing, a debt consolidation loan can provide you with more time to pay what you owe. This is because a debt consolidation loan allows you to pay all your creditors at once, leaving you with just the one loan to pay down. You'll avoid having to settle your debts with multiple creditors, which can result in negative information being recorded on your credit file.

If you're struggling to pay back your student loans, we can help. Contact a mortgage broker for more information about whether a debt consolidation loan is the right solution for you.

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