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Why College Loan Consolidation is Such a Wise Move


Mary D Wise

The idea that an effective way dealing with debt is to take out another loan can be confusing. For many people, it seems to be a step backwards that only worsens an already difficult financial situation. But it does work, and college loan consolidation, for one, has made life a lot easier for millions of students across America.

Arguably, the biggest problem students have while in college is not their studies, but their growing debt. So, managing student debt in an effective and efficient way is a huge help to their college careers. This is where consolidation comes in, slashing the overall debt and making the task of repaying it all the more straightforward.

Of course, just like every other kind of loan, college loans need to be treated seriously, especially when seeking a consolidation loan to clear it. But how can students considering making this move be sure that it will really work? Well, there are some clear benefits that need to be realized.

Cleared Debt and Improved Terms

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The principal benefits of college loan consolidation is that the initial loan debt is cleared and the terms of the new loan are much better. This is the whole idea behind consolidation, and the result is that the cost of repaying the finance aid is reduced drastically.

This is accomplished because the numerous loans that were initially taken out to cover college fees and living expenses are all bought out by the consolidation loan. So, managing student debt in this way means clearing the loans, resulting in the credit rating of the students being improved in one swift move.

This means that the interest rate applied to the consolidation loan is better than the combined interest rates of the three, four or even five individual college loans it pays off. So, while repayments on four loans may amount to $1,000 per month, the new deal requires perhaps $600 per month, saving some $400 in the process.

Fees and Fears are Slashed

When struggling to meet repayments, a student typically sees their debt increase as a result of the fees charged when payments are missed. But with college loan consolidation, those fees are basically removed – as is the fear factor that can affect the student when trying to budget everything effectively.

The fear comes from the knowledge of the consequences of missing payments. For example, if a payment of $300 is missed, then the late fees will increase the payment due to perhaps $325 which, when added to the next month payment, creates a due amount of $625. If a payment is missed again, then the third month could see $950 due. In this situation, managing student debt becomes almost impossible.

It gets even worse if payments on four or five different loans are being missed, but the consolidation reduces the the chances of facing late fees drastically. With one loan payment due each month replacing five college loans, the chances of being late become minimal.

Greater Positivity

Often, the most demoralizing aspect of juggling these debts is the uncertainty over whether they will ever be cleared. But through college loan consolidation, the end of the tunnel is clearly visible.

The spiraling costs and fees associated with complicated debt management is replaced by one payment over a specified period of time. So, managing student debt becomes a simple 120-step process, if the repayment term is 10 years for example.

Progress can be clearly mapped, creating greater positivity around the task. And, with the college loans paid off, giving the consolidation loan such excellent terms, the quality of life provided by extra cash freed up is greater too.

Mary Wise is a certified loan consultant who helps people get approved for

Guaranteed Bad Credit Personal Loans


Bad Credit Mortgage Loans

. To get help with your financial situation you can visit her at

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Why College Loan Consolidation is Such a Wise Move