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  1. 1. The costs linked to college education are so high these days that graduates now lookforward to beginning their working life on the back foot. This is not a dramatic overstatement, with statistics showing that most 25 year olds emerge from college with consumer debts of $30,000 and educational debts of double that. The answer? In mostcases, consolidating student loans is the best method of debt management.westernsky
  2. 2. The reality is that, with debts of almost $100,000 hanging over them,most graduates need to set about organizing their finances straight awayRe-negotiating repayment schedules is one way to do this, but in seekingconsolidation financing to clear debts, they get a fresh start Understandthat this does not mean that student loans, and the obligation to repaythem, evaporates away The debt cannot simply be gotten rid of Instead,the loan is effectively re-issued but with better terms
  3. 3. What is Consolidation? To explain, consolidation means taking control ofexisting debt by buying them out with a loan that boasts better termsWIth regards consolidating student loans, this entails buying out the loanstaken out over 4 or 5 years of college living, centralizing them into oneloan debt and repaying that debt under one interest rate Themathematics behind this exercise make it possible for a particulargraduate to save money, lowering the monthly repayment sum and, inthat way, lift some of the pressure off their shoulders What is perhapsmost important is that turning to this kind of financing to clear debts hasmore advantages than simply making life easier There is also the chanceto increase credit scores, improve the credit status of the graduate overtime, and allow them to concentrate more on building their careers andearning power by clearing their student loans
  4. 4. Advantages of Consolidation Loans As mentioned, the mathematics ofthese kinds of loans make it possible to lessen the pressure on agraduate while also offering a brighter financial future Basically,consolidating student loans means pulling all of the individual loans takenout while in college into one sum, then buying them out using anotherloan Because the new loan has one interest rate, the repayments areinevitably lower For example, one loan of $100,000 will have one interestrate, with a repayment sum of perhaps $1,000 per month over 10 yearsBut previous to this, the situation was bleaker
  5. 5. Perhaps 4 individual loans of $30,000, $40,000, $10,000 and $20,000,each charged at different interest rates, could mean total monthlyrepayments of $1,300 Clearly, getting financing to clear debts is the rightstep to take in such cases, but there are factors that need to beconsidered before anyone signs up to such a deal After all, the moveneeds to be beneficial before the student loans can be bought outFactors to Consider Do your homework properly There is no point inconsolidating student loans if the repayments are higher
  6. 6. The process can be complicated, but try to keep the perspective simple,that way the best decision is sure to be made Look at the balance due,the term of each individual loan, and the interest rate charged Beforeseeking financing to clear debts, it is essential to know exactly where onestands but know what the effect a longer term would have also Forexample, a 10-year repayment schedule may mean more in interest ispaid, westernsky but should lower monthly repayments, making it morepractical to clear the student loans
  7. 7. westernsky