Deciding when it’s time to consolidate your student loans is easy. Perhaps your monthly payment has become unmanageable, you’re tired of receiving multiple student loan bills each month or you’d just like a fresh start on your loans. (New year, new me, right?) But choosing your repayment option isn’t always easy. Since you don’t know what your financial situation will look like in the future, it can be hard to plan ahead. Plus, each borrower and their situation is different so there isn’t a “one size fits all” recommendation. In this blog post, we’ll help find the best consolidation loan repayment option for you.
Choose from 3 flexible repayment options.
Most students graduate college with a mix of education loans, both federal and private, from an array of lenders. Student loan consolidation works by combining those loans into one. This simplifies life by giving you one lender, one monthly bill and one interest rate. (It also provides some extra perks that we’ll get to later!) Since each situation is unique, iHELP offers a few different student loan consolidation repayment options.
- Principal and interest payments. This is the payment schedule borrowers are automatically set up with, unless they request another option. Borrowers make full payments, just like on any other type of loan. Interest starts accruing once the loan is dispersed. When compared to the other options, this is the option that allows borrowers pay least amount of interest over the life of the loan.
- Interest only payments. Borrowers can request a 24 month interest-only repayment schedule. If a borrower needs a little breathing room, and qualifies this option allows for payments to start small and after 24 months the payment schedule will return to the standard principal and interest payments for the term remaining on the loan.
- Graduated repayment. This option allows borrowers to make interest only payments for a set period of time and then the payment amount gradually increases until they are making the full principal and interest payments. Keep in mind, if you’re really struggling to make the minimum payments, it’s better to switch to a manageable plan than it is to have late or missing payments.
Student loan consolidation borrowers are set up with the standard principal and interest payment schedule unless they request another repayment plan.
Start with your budget.
Before choosing a repayment plan, it’s best to evaluate your current financial situation. Your income and other expenses are factors in the decision so start by creating a budget and setting some long-term goals. This helps you identify what you can afford to pay each month toward your loans, the length of time it will take to pay them off and how to maximize your dollars. Check out our FREE Financial Planner to get started. Regardless of the plan you choose, you can always pay extra toward your loan to pay it off faster and with less interest.
Here’s what you should consider.
Next, it’s time to evaluate your goals. Do you need a lower monthly payment? Are you behind on other debts, like credit cards or a mortgage payment? Do you want to pay the least amount possible in interest? These factors can help you choose the option that suits your needs. Also determine whether you’re in a good place to commit to making full payments. If so, great. If not, it’s nothing to be ashamed of. Financial situations can change quickly so it’s best to plan accordingly. If you have questions about choosing a student loan consolidation repayment option, be sure to start a conversation.
Other benefits of an iHELP Consolidation Loan.
In addition to our flexible repayment options and entertaining blog posts, here are a few reasons you’ll love consolidating your student loans with us.
- Early cosigner release. After 24 months of consecutive on-time payments are made, borrowers may have the option to release their cosigner provided they meet the eligibility requirements on their own at that time.
- Most education loans are eligible. Both federal and private loans can be included in a consolidation loan, including Parent PLUS loans. You can choose to consolidate just some of your loans, or all of them. When consolidating federal loans, you will lose any student loan forgiveness benefits you’ve worked towards so be mindful when doing so.
- All schools qualify. To meet the rising costs of college, we’ve made financing more available to all borrowers with student loan debt. Students who have attended any institution are now eligible to consolidate their student loan debt with an iHELP Consolidation Loan.
- Deferment and forbearance options. Consolidating resets the clock on deferments and forbearances, meaning, you get a fresh, new loan. If you’re unable to make a payment, let us know as soon as possible so we can help.
- Competitive rates. Borrowers choose between fixed or variable rates and some people even qualify for a lower interest rate upon consolidating. Our 10 year fixed rate loan is currently 4.75% – 8.00%, our 15 year fixed rate loan is 5.50% – 9.00% and our 20 year variable rate loan ranges from LIBOR + 2.50% – LIBOR + 8.50%.
- Get a transparent, reliable lender. It’s also an opportunity to switch lenders if you’re not completely satisfied with your current company. Especially since you’ll always get one-on-one service and a single point of contact. With more than 3 decades of experience, we know student loan consolidation inside and out.
If it’s time to consolidate, our goal is to make the application as easy as possible. Let us know if you have questions along the way, we’re always here to help.