02.25.10 | How much can you REALLY save by consolidating?
Let’s say you took out $25,000 in federal loans for college. Now that you’ve graduated, you’re grace period is almost up and the payments are expected soon. It’s a tough time for any graduate, particularly those who might not have found a job yet. The last thing you need is another monthly bill to pay.
But by consolidating your loans, you spread out your payment plan and the new interest rate is a weighted average of your previous rates, which can save you money in the long run.
Take the aforementioned $25,000 debt. With a 6.8 percent interest rate, you can consolidate to a low payment of $192 per month. If you don’t consolidate, that payment becomes $288 per month. That’s a difference of $96 per month, or $1,152 per year. What can you do with an extra $1,152?
- Buy a big-screen HDTV.
- Take a vacation.
- Pad your savings/build up an account for graduate school.
- Pay off your loans quicker by contributing the difference to your monthly payments.
Do any of those options sound good to you? Then consolidate now!
The Student Loan Help blog is sponsored in part by:
