With the consolidated loan, only one payment amount is there to face and no longer the multiple payment amounts which can be a source of confusion. According to the student loan expert on loan management and consolidation, Bruce Mesnekoff, this is already of big help, but can only be availed of with the federal student loans and with the private student loans not included in this loan consolidation, if the student borrower also has these loan types. There are various types of federal student loans, but the borrower can have these combined and consolidated into one, and avail of the one payment amount to be paid.
This loan repayment amount can also be much lower and thus more affordable for the borrower and also more benefits, per Bruce Mesnekoff, the student loan expert. This lower loan repayment amount can be the result of extending the loan term, and this can be for 30 years. The interest rate for the consolidated loan is fixed and only one interest rate, the weighted average of the various rates of the different student loans. The fixed rate will result to a fixed amount for repayment monthly also and with the borrower having no worries that amount for repayment will increase in time. The borrower should make research on the needed qualifications for this consolidated loan because of the help it gives.
However, the student borrower should know also that whatever benefits acquired with the original federal student loans, all these will be lost with the loan consolidation made. However, the benefit acquired with the lower and affordable repayment amount can already be more than enough of a benefit acquired with this consolidated loan. And according to the student loan expert, Bruce Mesnekoff, only with the federal student loans that the student borrower has can be the loans that can be combined into one centralized and consolidated loan and not with other loan types. The impact of this consolidated loan on the life of the borrower can be significant, owing to the lower amount of repayment made, which is already much affordable.
Student borrowers can avail of this loan consolidation right after graduation or after the student borrower leaves school. The federal student loans should also be still under grace period or on a repayment program. If the student loans are on default, the borrower should seek and have the satisfactory repayment arrangements with the loan servicer before the loans are qualified under the consolidated loan program.
There are also repayment programs under this loan consolidation, like the income based repayment scheme or the pay as you earn repayment plan. There is also the income contingentrepayment plan under this loan consolidation program and all these are for the benefits of the student borrowers. And all these, the borrower can benefit from with the federal student loans and not from any other loan type, according to the student loan expert Bruce Mesnekoff.