College gradually is becoming unaffordable for the students in today's economy as the unemployment rate also stubbornly hovers at a high rate. Because there is a scarcity of jobs in the United States of America, most students are graduating with a huge amount of debt and do not have enough incoming funds to make future payments toward lowering their debt.
Approximately, three out of four people feel that attending college has become a tougher task to afford, and 80 percent of students feel that attaining a higher education is necessary for obtaining good jobs. If you've incurred too many federal loans and you're not able to repay them, you may opt for a government debt relief option
such as the federal loan consolidation. Here are some of the benefits you may reap when you consolidate federal student loans.
• Single monthly payment:
As you take out the debt consolidation loan from the U.S. Department of Education, you have to make a single monthly payment to the loan instead of paying multiple lenders. If you were facing trouble while managing multiple payments on multiple loans, you will be able to eliminate them through a direct debt consolidation loan.
• Lower and revised interest rates:
The interest rates on the debt consolidation loan will be much lower than what you were paying on the actual educational loans. Most of the student loan defaults are due to the outrageously high rates they have to pay. However, when you take out a debt consolidation loan, the rate will be much lower than what you pay on the loans, and this will reflect on the monthly payments.
• Repayment plans can be shuffled:
When you take out a direct debt consolidation loan, you can repay your loans through the different repayment plans such as the Income-Based Repayment Plan and the Income-Contingent Repayment Plan. You also can change from one repayment plan to another according to changing financial needs.
• Revised monthly payments:
The monthly payments on the debt consolidation loan will be much lower than what you were paying on the educational loans; therefore, you will be able to save a sufficient amount of money every month.
• You can boost your credit score:
The direct debt consolidation loan will make affordable the rates you have to pay so you can make timely payments to get out of debt. This will certainly boost your credit score.