College Loan Consolidation Improves Your Credit Score

College Loan Consolidation: Improvements to Your Credit Score Is Just One of the Benefits You Can Expect

A college loan consolidation improves the credit score for students loans that are due. Imagine the benefits of college loan consolidation plans to save you money. If your college funding came from more than one source, it can be hard to manage these loans together. And if it took multiple loans from private sources or federal sources to meet the entire cost of your going to college, you could have trouble paying so many different interest rates at the same time. This is where college loan consolidation comes in. It helps you combine several debts together into a loan administered at a single point. It also it helps you pay one low installment instead of several ones that can add up to something pretty hefty. Finally, it makes sure that your obligations are made simple.

There are several financing programs that help you with your college loan consolidation plans. The FFELP or the Federal Family Education Loan Program and the FDLP or the Federal Direct Student Loan Program, more often identified with general federal financing, have options that allow you to bring all your college loans and debts under one umbrella. They can give you options in longer loan terms, lower payments, fixed interest rates and much more. And of course, extending a loan to 25 years or so will certainly lower the level of your monthly obligations. But paying a loan for that long can certainly make things better. In the end, you'll find that you will have paid a lot more than you might otherwise have paying in a shorter time. It'll take quite a bit of research before you are comfortable enough knowing what exactly to do. But, to consolidate college loans makes perfect sense.

With federal programs like the William D. Stafford loan program, the Direct Stafford loan program and the PLUS program aiming to help you with your college loan consolidation plans, you certainly have a variety of choices. Apply to any of these plans, and you'll receive information packets that should help make it easier for you to decide. You want to take into account the kind of relief you get with your monthly payments, the interest rate reduction that you get and the improvements to your credit rating that the whole exercise can bring. When you consolidate your loans, all your small loans are paid off. When you have loans that have been paid off, you get some pretty great credit score improvements.

Of course, all of this comes to you only if you qualify. To qualify, you need to have a FICO credit score that is at least 625. You also need to have all your college loans add up to at least $10,000 and you need to either have graduated already or be a part-time student. And finally, no loan of yours should be in default. Remember, if you have a combination of federal and private college loans, you'll need to consolidate them in different packages. You can't club private and federal loans together in the same package. On a federal loan package, you'll find that the interest rate you pay will be the average of what you used to pay on all individual loans. That would make taking the time to do a college loan consolidation worth the time and effort.

Anyone who neglects to explore the possibility of a college loan consolidation does so to their own disadvantage. The benefits are numerous, and they are easy to come by, especially online.