The cost of school education is sky rocketing in today's society. The only option that students have is to go in for school loans. They need loans not only for school fees and exam fees but also for books, clothes, food, boarding and so on. So they keep accumulating these loans and they become a huge colossal amount.
Once they complete their education, all these loans fall due. However, they do not find good jobs immediately and they find it difficult to repay these loans. The best way they can solve this problem is to go in for school loan consolidation. By this, all their loans with the various lenders are combined into one loan. Next, the interest rate, terms and duration of the loan is fixed based on the financial situation of the borrower.
These loans normally have a term of around 20 to 30 years. This ensures that the amount of monthly repayment they have to pay reduces a lot. Sometimes, this is only 50 percent or lesser than what was previously paid.
The main advantages of School Loan Consolidation are
o No risk of defaulting on loan payments
o Reduces hassles as you have to make only one payment to one lender. Previously you had the burden of making multiple payments to various tenders.
o Improves your credit score as all your previous loans are considered paid and you have only one loan to your name.
The only disadvantage of consolidation is that your interest amount is slightly more when compared in absolute terms. Since there are various scams doing its rounds, always be alert and aware before you go in for this form of financing.