Introduction: Finding the Best Student Loan Consolidation Companies
Graduating from college is a momentous occasion for anyone; it is a moment to be celebrated and enjoyed.
Between six and twelve months later, however, the first bills for your student loan debt start to roll in — along with the full realization of the debt you’ve accumulated.
Since many recent high school graduates don’t actively search out the best loans, finding the best consolidation loans may very well be one of your first post-graduation responsibilities.
The best loan consolidation is one that will allow you to benefit from a lower interest rate and conveniently roll your loans into one, easy-to-manage payment plan.
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While there are a number of loan consolidation companies out there, not all of them offer the same benefits. Furthermore, while student loan relief through the best consolidation loans has helped millions of people deal with their debt burden from their college education, the best loan consolidation plan isn’t necessarily best for everyone.
In this brief article, Advisory HQ will help you answer the question that is on the minds of so many college graduates: How to consolidate my student loans?
We’ll begin by looking at the importance of student loan relief before helping you understand what to look for in private student loan consolidation lenders.
We’ll then go on to explain how to consolidate federal student loans and how the best private student loan consolidation companies compare to federal loans. We’ll end by quickly reviewing five of the top student loan consolidation companies so that you can find the best option for how to consolidate my student loans.
The Importance of Student Loan Relief
Tuition rates are on the rise, and more and more people are finding that the only way to finance a college education is through taking out extensive student loans.
If you’ve studied at a private university and weren’t able to get any sort of scholarship, you will most likely end up with an educational debt somewhere in the six figures range. Loan consolidation companies are one way to help college graduates find student loan relief.
National Mortgage Professional reports that the average age for first-time home buyers is 33 years old, which is several years later than earlier generations purchased their first home.
The report states that “Americans are renting for an average of six years before buying their first homes. In the 1970s, they rented for an average of 2.6 years.”
One of the main reasons that many young people today are waiting to purchase their first home is because of the buildup of college debt. Many people simply don’t feel comfortable taking out a $250,000 loan for a home when they still owe several thousand for their education.
Furthermore, banks may not approve young people for a mortgage if they still owe a heavy amount for their education. The best student loan consolidation companies may very well help people find the student loan relief they need to get out of debt quicker.
Private student loan consolidation lenders are also important tools for student loan relief because they can help you benefit from much lower and more favorable interest rates.
Student loan interest rates have lowered considerably in the last decade. In some cases, especially if your student loan was taken out over a decade ago, you may be paying around 10% annually when today the best student loan consolidation companies may be able to get you a rate anywhere between 2.5% and 5%.
Lower interest rates on your student loans offered by the best place to consolidate student loans will allow you to dedicate more of your funds to paying off the principal on the loan, thus getting you out of debt more quickly.
What to Look for in Student Loan Consolidation Companies
The first thing you’ll need to consider in your search for the best student loan consolidation companies is what type of loan you have. There are basically two types of student loans: federal loans and loans offered by private lenders.
If you have a federal student loan, you’ll probably not want to consolidate your loans through private student loan consolidation companies. The federal government offers its own consolidation programs that we’ll explain in more detail below.
If you have an educational loan from a private lender, the best consolidation loans offered by different loan consolidation companies may be your best option. Obviously, one of the most important factors to consider when researching the top student loan consolidation companies is the interest rate that they offer.
While it may be more convenient to only pay one bill per month, if you end up paying more per month, then you haven’t found the best loan consolidation available.
Furthermore, you should also be looking for the best student loan consolidation companies that will allow you to wrap all of your different loans into one loan.
While it usually isn’t a good idea to consolidate a federal loan with private student loan consolidation lenders, if you have several private loans, the loan consolidation company that you choose should allow you to consolidate all of those loans without exception.
Lastly, you will also want to be on the lookout for the best consolidation loans that offer a variety of loan terms. Everyone’s personal financial situation is different and the loan term should reflect your monthly income and long term financial goals.
The best student loan consolidation companies usually offer a variety of loan terms to choose from.
How to Consolidate Federal Student Loans
According to the Huffington Post, “if you’re consolidating with the federal government, consolidating your loans means combining your multiple federal student loans into one new federal loan, called a Direct Consolidation Loan.
You have some flexibility in picking your loan term, but you’ll simply receive an interest rate that’s a weighted average of your existing rates.”
Federal student loans usually come with a number of important perks that most private lenders don’t offer. For example, many government educational loans offer income-based repayment options that are much more flexible than private student loan consolidation lenders.
Even if you are able to find a lower interest rate from one of the best student loan consolidation companies, it may be wise to consolidate your loan with the federal government so as not to give up the benefits that come with federal loans.
Private Student Loan Consolidation Companies
There are a number of private student loan consolidation companies out there. As with most loans, each of these student loan consolidation companies offers different terms and conditions on the loans.
We’ll review five of the top student loan consolidation companies below, but one thing that we should mention is the importance of prepayment options.
If you don’t have a lot of disposable income right after college, you may be forced into choosing a longer repayment plan that offers lower monthly payments but higher interest rates.
For example, a $100,000 student loan at 6% interest over a 15 year term may offer you a monthly payment of around $850, but you’d end up paying well over $50,000 in interest over the term of the loan.
The best place to consolidate student loans should allow (and even encourage) you to prepay on your student loan. If, for example, you receive a promotion at work or find a higher paying job, the best student loan consolidation companies should not make it difficult for you to prepay through upping the monthly payment on your loan.
If you have an $850 monthly payment but are able to pay $1,500, the extra should automatically go to paying down the principal.
Top Student Loan Consolidation Companies
So how do you know which student loan consolidation companies are best for you? Below you’ll find a review of five of the top student loan consolidation companies.
- Student Loan Consolidation Company CommonBond
CommonBond is by far one of the best student loan consolidation companies out there. With no minimum income requirement, they offer three types of best consolidation loans: fixed rate loans, variable rate loans, and a hybrid option.
The interest on these loans varies from 2.74% to 7.74%. Furthermore, CommonBond has no prepayment penalty and even offers certain forms of protection to their borrowers.
If you lose your job and are unable to continue to make payments on your student loans, this top student loan consolidation company will temporarily suspend your payments with no penalties until you find new work.
As an additional benefit, CommonBond will refinance student loans, meaning that they will consolidate loans at a lower interest rate. This process saves the average borrower saves $15,114 over the total life of the loan.
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- Student Loan Consolidation Company Citizens Bank
Citizens Bank is another of the most reputable student loan consolidation companies. They offer loan terms of 5, 10, 15 and 20 years.
Their variable loan rate starts at just 2.19%, one of the lowest interest rates on the market. You will need to have an outstanding balance of $10,000 dollars on your student loans and will also have to show a proof of income to apply.
- Student Loan Consolidation Company College Ave
College Ave offers quality consolidation plans that work for all sorts of people. They accept balances anywhere between $5,000 and $150,000 making them one of the most flexible student loan consolidation companies out there.
Their fixed rate starts at 4.74%, but you will need to show a minimum household income of at least $75,000.
- Student Loan Consolidation Company iHelp
One of the student loan consolidation companies with the highest loan amount available is iHelp. With iHelp, you can consolidate up to $250,000 in student loans. For people who have high outstanding balances on their undergraduate and graduate studies, iHelp may very well be an option for the best consolidation loans.
- Student Loan Consolidation Company Alliant Credit Union
Alliant Credit Union is another of the best student loan consolidation companies. If you set up an automatic payment plan with your bank account, Alliant will offer you a 0.4% discount on your interest rate.
Most student loan consolidation companies only offer a 0.25% reduction for automatic payment, which makes Alliant a great option for folks who have the ability to set up this type of payment plan.
How Finding the Best Place to Consolidate Student Loans Can Get You Out of Debt Quicker
“How to consolidate my student loans” is on the minds of many recent college graduates. Searching for the best student loan consolidation companies that offer the best consolidation loans is a great way to find student loan relief.
Any of the five student loan consolidation companies we reviewed above should be able to work with you to help you find a way to get out of debt quicker and move on to the rest of your life.
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