A lot of students are racking their brains trying to pay off several loans they have accessed. It doesn’t end there, many years after college, a good number of students find themselves wallowing in student loan debts.
Being a student in itself is quite difficult, scarcity of funds makes the whole thing worse and having different bills breathing down your neck makes life horrible. In modern America, a student loan is a monster debt. As a matter of fact, the total amount of outstanding student loan is now over 1.5 trillion dollars.
A lot of borrowers see student loans as a sort of relief and this has raised a lot of concerns over the years as some borrowers deal with their loans for a long time after school. It is also being estimated that over 1.8 million borrowers above age 62 are still paying off their student debts.
About 45 million Americans live on student loans and a lot of them are struggling to maintain the multiple payments involved in servicing the loans. The high rate of interest and the overall worries of having to owe someone is enough to weigh one down. This calls for an efficient alternative and student loan consolidation becomes necessary. It is a smart way to improve your monthly cash flows and save more money on interest down the line.
Why do Students Need to Consolidate their Loans?
Students consolidate their loans for several reasons and they differ based on the circumstances. However, the following two reasons are considered to be the primary cause that prompts consolidation.
The first reason is considered to be the need for steady financial support. This helps students save more money when compared to what they spend on student loans daily. The consolidation process is easy and has proven to be an effective way of ensuring that the financial burdens of the students are eased.
The idea is for students in debts to find the lowest rates and consolidate their loans to an easy payment. Student consolidation loans help the student ensure that their loans are refinanced in a more convenient approach.
The interest rates are the biggest issues concerned with student loans. This is due to the fact that higher interests will probably lead to more debt after your payment has been completed hence a lower interest rate, on the other hand, ensures that you can enjoy huge savings during that time.
Another reason why students consolidate their loans is to ensure that their monthly expenses are greatly reduced. The idea of one big loan that swallows up several others at a lower interest rate makes consolidation an easy alternative for students.
Furthermore, having multiple student loans from diverse companies usually, cost more money and leads to increased daily expenditure. Effective consolidation lowers your monthly payment when compared to having different loan refinancing programs that are being paid separately.
Sometimes, consolidation and refinancing are both used in each other’s stead but there is a notable difference that exists. Both methods of dealing with a loan have their advantages and drawbacks. The entire scope of consolidation simplifies the loan repayment while refinancing focuses on helping you save more on the loans.
The advantage of a student debt consolidation is that it not only provides you with an easier mode of repayment, it also helps you save as well.
Best Student Loan Consolidation Providers
The statistics of students battling huge debts simply means that a lot of them are seeking for a way out. Student loan consolidation provides a faster route out of the murky waters of debt but it is important to exercise caution and make informed decisions.
Taking uninformed and hasty decisions in securing the services of a debt consolidation lender could have grave consequences because there are lots of student loan consolidation scams out there.
2019 has so far enhanced its status as the year in which student loans have hit the highest level. The 2019 statistics for student loan debt has revealed how weighty student loan debt crisis has become for borrowers across all ages and demographics.
The over 1.5 trillion dollars that are being owed in student debt loan is made up of 44 million borrowers. The student loan debt is now the second highest in the debt category, second to mortgage debt and ahead of credit cards and automobile loans.
Deciding where to consolidate your student loan might be a little difficult with several lenders out there. The best debt consolidation for students must include rates that are extremely low because that is the primary objective. Based on this, some of the market’s best consolidators include
This is a student loan lender that provides loans based on funds made available by community lenders. Lendkey is a top-rated student loan company and has a lot of qualities. The student loan company is particularly good for undergraduates.
Lendkey makes available their services at a very low-interest-rate alongside flexible repayment options. One of the qualities that makes Lendkey a great student debt consolidator is that they also include options to make interest-only payments as well as interest rate reduction after a minimum of 10% principal payoff has been reached.
This organization is very suitable for students who desperately need a loan. They charge no origination fees and loan offer ranges from 5,000 dollars to 125,000 dollars for undergraduate loans and graduates can get up to 250,000 dollars while medical student loans get as high as 300,000 dollars.
Some of Lendkey’s qualities include
- With the Lendkey’s network of non-profit lenders, students have higher chances of approval
- Full support – they organization ensures that consumers are guided by a professional customer service team right from the initial application to the final payment
- Lendkey provides its services for both graduates and undergraduates
- Their repayment terms are highly flexible and they include 5, 7, 10, 15, 20 years option
- There is also an unemployment protection clause with 18months being its longest period. The loan payments are paused while in-between jobs
- They offer consolidation and refinancing of private and federal student loans
- They have fixed rates from 3.64% APR to 7.50% APR with auto pay and variable rates from 2.53% APR to 9.06% (auto pay)
- The consigner release is also made available after 12 months of on-time payment
- A minimum of 24,000 dollars yearly income is needed to qualify with a minimum balance of 5,000 dollars for refinancing.
Sofi is simply out to cut the cost of your student loan so when the debts become overwhelming, you can hire their services. Sofi, short for Social Finance is a foremost lender especially for those with advanced degrees.
They consider a couple of indicators beyond your credit scores like your university and degree when approving loans. Sofi is a verified debt consolidator for bad credit because there is no minimum credit score. However, for a borrowers request to be approved, they must have a good or excellent overall credit score.
Sofi fully operates in all 50 American states offering loans beginning from 5,000 dollars. How about this for a piece of good news, there is no limit to how much you can borrow. They offer rates that are competitively low – currently as low as 3.899 percent with automatic payments.
No application is required, neither do you need origination. There is also no penalty and prepayment fee. Sofi borrowers are often thrilled by the benefits derived from the organization rather than the loans. The borrowers are often referred to as members and they get exclusive access to events, career coaches, wealth management services and a lot more.
Some Sofi qualities include
- 5, 7 10, 15, and 20 years repayment terms
- They also have unemployment protection where members’ loans are paused and they help find new jobs
- Sofi offers great career support
- 49% APR to 7.10% APR (with autopay) variable rates, capped at 8.95% or 9.95% APR depending on term of the loan
- 89% APR to 8.07% APR (with autopay) fixed rates
For those looking for the best student consolidation loan rate, Earnest provides you one in an expedient manner. The company was established in 2013 and since then, they have funded more than 4.5 billion dollars’ worth of student loan and up to 50,000 borrowers have been refinanced.
Earnest remains a wise choice for any borrower because the company offers the option to skip one payment a year.
There is no maximum amount you can borrow and the minimum amount is 5,000 dollars. Earnest is best for low credit borrowers and they have a refinancing option available for undergraduates and graduate student loans from both private and federal lenders.
Earnest’s characteristics include
- Rates begin at 2.49% APR variable (with autopay) and 3.50% APR fixed (with autopay)
- Earnest loans are available to borrowers who have at least 660 credit score.
- They never hand you over to a third party. They have an onsite team that partners with you throughout the entire duration of your loan
- They do not have income requirements that must be met, rather, they consider multiple data points to assess your financial clout to deliver the lowest possible rate.
- They offer huge flexibility and allow the borrower to choose a favorable loan duration and a convenient monthly payment.
- No origination fees neither are there any application or prepayment fees applicable.
This is widely considered as the best debt consolidation, especially for medical residents. The company is a subsidiary of KeyBank and the online lender has provided student loans and refinancing since 2013. One major advantage of Laurel Road is that the entire loan process can be completed online.
Their loan types include graduate, residents, parents, refinance and fellows. They, however, pay special attention to student loans to graduates. The company understands that residents get a much decent income than they have at the end of their residency hence, they offer as low as 100 dollars monthly payments during the program.
- Laurel offers 2.50% – 6.65% (with autopay) variable rates 3.50% – 7.02% (with autopay) fixed rates
- They offer refinancing and consolidation of private and federal loans
- There is no origination or prepayment fee required
- The offer a 5, 10, 15, 20-year repayment terms
- There is no minimum income required.
Laurel offers economic hardship support which is evident in the absence of any origination or prepayment penalty. The advantage of this is that when the borrower gets that big doctor salary, the loan can be paid off with no extra charges.
With a possible interest rate reduction of over 0.50%, Citizens Bank is a top rated lender. With just a few years short of 2 centuries, Citizens bank is by far one of the oldest lenders in the loan business.
Its student loan reputation became prominent in 2014 when they introduced some attractive student lending products. Citizens Bank offers some of the best services in the student loan consolidation industry. They offer loan amounts ranging from 10,000 dollars to 90,000 dollars for undergraduates while graduates can access up to 350,000 dollars.
Citizens bank offers quite a notably low-interest rate reduction for customers who have put in place auto payments as well as those who are members of the bank – 0.50%
ELFi – Education loan finance
ELFi to a large extent is regarded as a comprehensive solution to the financial woes of any student. The company offers fixed rate starting from as low as 3.09% which makes them one of the best debt consolidators for students.
There is no maximum amount that can be borrowed neither is there any application, origination or prepayment fees and penalty. With no limit to what you can borrow and no application, origination or prepayment, customers can access loans starting from 15,000 dollars.
There is also a 12 month forbearance period as well as military deferment. Apart from the numerous benefits embedded in ELFi loans, the company also has a referral program set up with the aim of rewarding loyal customers. Borrowers get a 400 dollars bonus when they refer friends as a token of EIFi’s support to ease the financial burdens of students.
To qualify for their student loans, a 34,000 dollar minimum annual income is required as well as a credit score of 680.
With scores heading to college each year, not everyone can afford to pay the cost of getting educated out of their pocket. The cost implication of getting educated has never been higher. Over the turn of the decade, the cost of university education has tripled compared to other school-related expenses.
Most student often results in several borrowings to finance the cost of getting educated. They obtain student loans with the aim of having their labors yield greater income down the line.
.However, while most dream of securing great jobs to offset the cost of getting their degree, years pass and they are still hooked on the debt they incurred. This has necessitated the need to seek debt consolidation to ease their financial burdens.
You might also want to read Debt Consolidation Pros and Cons: The Benefits and Alternatives