Once you finish your college studies, it is time to start repaying your student debt. Depending on the career you have chosen you may have a very high amount of debt to repay. Even though you probably join the workforce right away, it may get hard to afford the monthly payments on your student debt. Fortunately there are debt consolidation solutions you can resort to in order to make your financial life a lot easier. People often wonder whether it is smart to wait till graduation in order to consolidate your student debt. There is no standard choice when it comes to this issue; however, many debt professionals think that it is best to consolidate student debt when there are no more chances of generating new debt. Others reason that it is a smarter idea to consolidate when market conditions are more advantageous. When Does Repayment Start? When it comes to federal loans, you will have to start repayment six months after you have finished college, whereas private student loans have different repayment programs and you need to check the agreement to see what kind of grace period you have. However the average student has higher amounts of federal student loans and thus, we will focus on federal student debt consolidation. Debt consolidation implies trading your variable rate federal student loans for a single fixed rate federal student loan. This is usually referred to as locking the rate on your student debt. All your federal student loans are replaced with a single loan with a fixed interest rate that by extending the repayment program attains lower monthly payments that are a lot easier to afford. What Can Be Achieved Through Consolidation Through Student Debt Consolidation you can reduce your monthly payments by up to 50% or more. The resulting installments will be a lot easier to manage and thus, you will not have problems affording them along with other debts, like a mortgage loan or a car loan. By consolidating your student debt you can have healthy finances and enjoy your life after graduation without making sacrifices. Consolidating may imply that your debt grows, because even though the interest rate remains the same, the extension of the repayment program implies that you will be paying for interests a lot longer. However, on a monthly basis, you will be paying less, which will lift all the weight from your shoulders from the very beginning and eventually, you can always prepay your debt if your finances improve. Benefits Of Waiting Till Graduation Waiting till graduation for consolidating your debt will let you incorporate all your student debt to a single loan. And even though you may have consolidated your debt before, if you took at least another federal loan, you can consolidate again after graduation. This will let you budget your payments more easily and decide your loan terms knowing what to expect from your income while at earlier stages of college you can hardly know what you are going to earn when you graduate. However, make sure to consolidate at least a couple of months prior the six months grace period has ended so you do not have to rush in and risk making an unwise decision.
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