A Lesson in Consolidating Student Loans

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So, you graduated with honors from a top-notch university. Your future is bright and your diploma is framed. Why is it, then, that you can't seem to climb out from underneath the mountain of student loan debt that your priceless education cost you? If you're left wondering how you can lower monthly student loan payments—and possibly even your student loan interest rates—then it's time to head back to school. A lesson in consolidating student loans is all you need to pass the test of financial security.

Consolidation is Your Final Exam

Student loan consolidation is tempting—especially when interest rates are low. Chances are you've already receive numerous offers from different lenders vying to get your loan consolidation business. However, it is imperative that you consider student loan consolidation a final exam of sorts.

As of today, student loans may only be consolidated one time. If you find yourself in a new consolidation that isn't quite what you hoped for—you're stuck. Take the time to investigate the interest rates, terms, and payment options before you take a plunge. After all, this is one final you can't afford to fail.

Who Can Consolidate?

Anyone who has student loans can consolidate them. If you are married, and you're spouse is also carrying student loan debt, you may also choose to consolidate your student loans together—merging your individual student loan debts into one.

While college graduates and students like to joke that student loans follow you "to the grave," be aware that this saying is especially true for married couples who merge their student loan debt. Should one spouse die, the remaining one will be responsible for all student loan debt—not just his share. While most people don't plan on dying, knowing the exact debt-load that the remaining spouse could afford can avoid making a sad situation even worse.

As with all loans, you must consider anything that can impact your ability to repay or your ability to acquire the loan in the first place. While consolidation loans tend to have less-stringent credit requirements, keeping your credit clean will ensure that you are eligible to consolidate your loans. In addition, higher credit scores can lower your interest rate, and save you thousands of dollars.

How Do I Consolidate?

If you have multiple student loans, then you already have the names and phone numbers of at least two potential student-loan consolidators. Check out the lenders you're already using, as they may be likely to offer you a better deal if you—as an established customer—give them your business. Otherwise, most major banks offer student loan consolidation. All you have to do is call and ask.

Consolidating student loans is an easy and effective way to lower monthly payments and save thousands of dollars on interest. Taking time to learn about student loan consolidation can—and will—give you an A+ on your financial portfolio.

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