Pros and cons to consolidating loans
Ideally, the payment plan is for a set duration that will pay off your accounts in full.
Because there are lower minimums with a consolidated student loan, it becomes possible to pay them off much more quickly by paying down the principal amount when there is extra money floating around. If you can lock in an interest rate of 3% on your student loans, but receive a 10% return on the investments you’re making, then what you have is called a “good debt.” It means your returns outpace the debt interest that you must pay to stay current.Most students today are coming out of advanced schooling with a degree and a load of student loan debt. It isn’t uncommon for payments to be as high as 0 per month.Even with income-based repayment schedules, it can be nearly impossible to afford every monthly payment from every student loan that exists.If you’re having trouble making ends meet each month, and you’re looking for answers, debt consolidation can work for you if you’re disciplined, understand what consolidation can and cannot do, and follow a few simple guidelines.Debt consolidation is the process of gathering your debts into one account with just one monthly payment.
This will usually get you a better rate, but it only makes sense if you’re getting a decent rate on your savings.