Many people who exit college and have a large amount of student loan debt will often seek out a low interest student loan consolidation in order to make their debt more manageable. This can be beneficial but there are some things that should be done before anyone chooses this option.
The low interest student loan consolidation can make repayment easier as all of a graduate’s student debt will be in one place. However, even at a low interest rate a student loan debt consolidation may cost more over the long run since a higher principal amount will be attached to the interest rate.
Taking time to sit down and do the math and figure out how much it will cost to repay student loans separately versus with a consolidation loan is going to be the only way to really figure out which option is going to be best for a specific college graduate dealing with student loan debt.
However, it should be noted that not all loans will consolidate as federal student loans often will not consolidate with private student loans or institutional loans. Also, unsubsidized and subsidized loans will not consolidate, so looking at the types of loans you have should be your first step before consolidating.
If an individual with student loan debt decides that they are going to consolidate their loans, they need to make sure that they form a budget and save money to a point where they can pay as much as they possibly can on their student loan consolidation loan so that they can avoid spending more money than they have to over time. It may take some financial sacrifices but getting rid of student loan debt is going to make anyone’s financial life much easier.