You may have taken an education loan or a student loan and student credit card when you were a student. Now, if you are had problems in making payments in all of these together with your credit card payments and other loan payments, you can take advantage of credit card consolidation. In credit card consolidation, the many debts that you may have get consolidated into a single debt and you get a lower interest rate.
Consolidating Student Debt
Student loan debts can be consolidated like any other debt or any credit card that you may have problems with. However, only unsecured debts (loans) can be consolidated and in case of education or student loans, only the private loans (debts) can be consolidated.
If you do have federal educational loans, you may talk with your lender about the problems which you are facing and you will be offered many kinds of debt pay off schemes or programs. But as said, the federally insured student loans or debts cannot be included in the credit card consolidation programs. To know the process of applying for a federal student loan do check out this article How to apply for federal student loan.
Coming to student loan consolidation and student credit card consolidation you can do it yourself or you can also take help of a consolidation company. If you are willing to try to consolidate your debts on your own, you can do it either through a balance transfer or you can get a credit card consolidation loan at a low interest rate to consolidate your private student loans and student credit cards.
However, if you do go to a credit card consolidation company for help, they will firstly analyze your finances and then help you to formulate a budget which suits you. Budgeting can help you to save money from your expenses and this will in turn help you to pay off your debt through the consolidation program they offer. The consolidation company will then negotiate with your lenders and creditors to consolidate your debts and then lower the interest rate on the debt. You will then have to make the payment to the consolidation company every month and then they will forward the money to your creditors and lenders.
Advantages Of Consolidating Student Debts
Consolidating student credit cards and student loans have some benefits. Some of these advantages of consolidating student loans and student credit cards are:
- Reduced interest rate: With a credit card consolidation the total interest rate on the unpaid bills gets lowered automatically. Thus the total amount that you will have to pay gets reduced and so the monthly payment gets reduced too. However, if you are willing to take a consolidation loan, you will need to have a good credit rating to get low interest rate consolidation loan. Thus reduced interest rate is an advantage in consolidating student debts.
- Managing bills becomes easier: With consolidating student loans and debts, managing your payment dues becomes easier. From henceforth, instead of making more than one payments every month, you will have to make only a single payment each month.
Other than this, since you are agreeing to pay off the debt and as you do start to make the payments, the collection calls nearly stop with time.