What are the benefits of consolidating your loans? The main benefit of consolidation is that it allows you to lock in a low fixed interest rate for the life of the loan. Understand though, that not everyone gets the lowest rate on consolidation. While some can lock in a very low rate close to 3.5%, others may pay slightly more depending on the original loan rates. So check with your lenders (or one of the Web sites listed on page 34) for information on how much your rate will decrease. Each Web site has online calculators, and you can even apply for a consolidation loan online. Note also that there is no fee for you, the borrower, to consolidate.

Another benefit to consolidation is that now you only have to make one monthly payment and to only one lender-saving you a headache each month from sorting out to whom and what you owe. There are also added bonuses, for instance, many lenders offer interest rate and payment reductions if you pay on time over a period of months and/or have your monthly payments automatically withdrawn from your checking or savings account.

Check out the Web sites, do a little homework and in the end you'll save yourself a nice sum of cash for consolidating your loans. Start the process now, so you can relax, get some sleep and focus on what's really important, your first real job!

Now that you better understand what kind of loans you have, you're probably wondering what's next. Pay off time! It may sound daunting to have to payback all of those loans, but don't even think about attempting to dodge your bills.

Not paying your loans back will cause your credit rating to plummet. And remember, declaring bankruptcy is not an option. Student loans are immune to bankruptcy. You may also face IRS penalties and possible garnishment of wages if you hold off on payment--so make those monthly payments on time.

So what's a good plan-of-action when beginning to repay your loans? A smart move is to look into consolidating your existing loans now while interest rates are still low.

Consolidation involves refinancing one or more of your student loans. The original balance is paid in full, and a new loan is originated for the combined amount and for a new term--all with a low fixed interest rate. Consolidation loans often reduce the size of your monthly payment by extending the term of your loan beyond the 10-year repayment plan that is standard with federal loans.
Depending on the loan amount, the term of the loan can be extended from 12 to 30 years. The reduced monthly payment may make the loan easier to repay. However, by extending the term of a loan the total amount of interest paid is increased. You can always make more than the minimum payment each month to cut the repayment period down and reduce the amount of interest paid.

According to the student loan industry’s own statistics, 39 percent of student borrowers no longer can afford to make the payments on their student loans due to unmanageable debt burden after college. Since student loan payments are so exorbitant, students no longer can afford NOT to consolidate, according to NextStudent, the Phoenix-based premier education funding company.

Discounts Offered By NextStudent Save Borrowers Money

The federal student loan consolidation rate is one mandated by the government; therefore, the only difference between companies offering the loan is the individual discounts or incentive packages offered through each company.

A federal student loan consolidation through NextStudent gives borrowers significant advantages. NextStudent’s 1 percent interest rate reduction is a LOCKED discount available for the entire life of the loan, not just as long as payments are made on time. This incentive can save students and their parents an enormous amount of money over the course of the repayment term.

NextStudent Federal Student Loan Consolidation Packages:

Standard Locked

* Discount of .25 percent for Auto-Debit payments
* Rate reduction of 1 percent LOCKED after 36 on-time payments
* Easy discount qualification process

Google Package

* Discount of .25 percent for Auto-Debit payments
* .375 percent rate reduction after six months of on-time payments
* 1 percent discount after 36 on-time payments (not locked)

2% Package

* Discount of .25 percent for Auto-Debit payments
* 2 percent rate reduction after 36 on-time payments (not locked)