College or university students are given loans by the state or by the government to help them in paying their fee. Some of these students will take numerous loans all of which have different monthly payments and interest rates.
Boosting your credit score
Even if a student benefits by getting loans from different sources, these loans can negatively affect your credit score. Consolidating your loans is on way d boosting your credit score. Having one combined loan will also lower your overall payment and thus make your credit rating more favourable. Also, this will greatly help you in lowering the ratio of debt to income.
Increasing your buying power
Your buying power will be increased by reducing the ratio of debt to income. Additionally, lowering the monthly debt payment and debt to income ratio is another great way of reducing the monthly bills. This will, in turn, help you in saving a lot of money over a lifetime.
Reduce overdependence on credit cards
Lowering your annual bills will ensure that you do not have to rely much on loans or credit cards. Sometimes you might come across a college student having six credit cards and a total balance exceeding over $ 2,100. As a student, smart financial planning will help you in living a good life that is free of debts.
Enjoy low interest rates on loans
Interest rates keep on changing with time. For instance, the current interest rates are lower than how they were in the recent past. A high interest rate would raise your college bill leading to a high repayment. Consolidating your loans will enable you to enjoy the current’s low interest rates. Ideally, consolidated loans have a low monthly payment and a long repayment payment.
Receive interest rates discounts
There are many companies such as scholar Point.com that are specialized in consolidating education loans. Students who consolidate their loans are offered additional benefits including consecutive payments and auto payments.
- Consecutive payments: Students who have consolidated their loans are given an opportunity of reducing their payment interest rate by a certain percentage. You will enjoy these payments once you make your payments in time.
- Auto payments: This is the additional reduction in the interest rate that is offered when you make your monthly loan payments automatically from the bank after consolidating your student loans.
- No interest deferral: Student’s loans are very flexible. students are given an opportunity of deferring their payments and stopping the interest rates from accruing once they are enrolled for postgraduate courses.