Is consolidating student loans a good idea
It's also more convenient to have only one debt payment to worry about each month, rather than a bunch of payments with different due dates.
Plus, you may end up with a lower monthly payment for the combined debts than what you are paying each month now.
Debt consolidation loans are obviously designed to consolidate all of your debt under one loan so you will only have to keep track of one payment each month.
This is also intended to place high-interest credit card debt under a lower interest rate so you will end up paying less in the long run.
Debt consolidation has a number of advantages for consumers trying to get a handle on their debt.
However, many factors should be weighed and lifestyle changes made before embarking upon a debt management program.
Carson received her Bachelor of Arts in English from Arizona State University.
In recent years, the issue of student loan debt has grown in scope from obscure to national.
If you don’t care about the extra cash and just want a consolidation for the simplicity of a single monthly payment, you can use any money you save to pay down the principal.
Many people use home equity loans for this purpose so they can also deduct the interest from their income taxes—something you cannot do with most other types of debt.
When you consider that you can end up paying a lot less interest by consolidating your higher-interest debts under one lower interest rate, debt consolidation sounds great.
Those who consolidate their debts must be prepared to make changes in their lifestyle to prevent themselves from getting back into debt on top of what they have already consolidated.
For instance, once you have consolidated your credit card debt, cut up all your credit cards so you won't be tempted to use them.
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The problem with debt consolidation, however, is that you are taking a number of unsecured debts and putting them into a secured loan.