Both federal and private loan consolidation plans can be quite beneficial if you know how to use them.
The primary goal of consolidating student loans may vary depending on your financial state, but you can easily enjoy a lot of benefits from consolidating the loans for sure.
In this article, we are going to take a look at an example to help us understand different options we get from student loan consolidation.
Let's say you have two private loans, L 1 and L 2.
L 1 is for $10,000, with 6.
8% interest rate and 15 years loan term.
L 2 is for $20,000, with 7.
5% interest rate and 10 years loan term.
When you pay these two loans separately, you will have to make monthly payments of $88.
77 for L 1 and $237.
40 for L 2; the total amount of monthly payments is $326.
17.
When we calculate the interest for these two loans, it is easy to see that the two loans cost $14,466.
73 on interest.
Using private student loan consolidation, we can combine these two loans into one consolidated loan that is either cheaper or has lower monthly payment.
Using the standard consolidation terms, the two loans will receive a cool 7.
38% interest rate for 10 years loan period.
The monthly payment is increased slightly to $354.
15 per month, but you will be paying only $12,498.
21; a saving worth over $1,000.
If the monthly payment is too high for you, you can opt for 20 years loan period.
The monthly payment is reduced substantially to $225.
59 per month, although you will be paying $24,140.
67 on interest throughout the loan period.
Depending on your main goal, you can easily use the right consolidation plan to get the benefits.
You can do your own calculations or compare deals provided by the financial institution you are engaging.
Find a reliable consolidation calculator to help you get started right away, and see just how profitable it can be to consolidate your loan.
With more student loans to consolidate, the amount of savings you can make will be greatly increased.
The primary goal of consolidating student loans may vary depending on your financial state, but you can easily enjoy a lot of benefits from consolidating the loans for sure.
In this article, we are going to take a look at an example to help us understand different options we get from student loan consolidation.
Let's say you have two private loans, L 1 and L 2.
L 1 is for $10,000, with 6.
8% interest rate and 15 years loan term.
L 2 is for $20,000, with 7.
5% interest rate and 10 years loan term.
When you pay these two loans separately, you will have to make monthly payments of $88.
77 for L 1 and $237.
40 for L 2; the total amount of monthly payments is $326.
17.
When we calculate the interest for these two loans, it is easy to see that the two loans cost $14,466.
73 on interest.
Using private student loan consolidation, we can combine these two loans into one consolidated loan that is either cheaper or has lower monthly payment.
Using the standard consolidation terms, the two loans will receive a cool 7.
38% interest rate for 10 years loan period.
The monthly payment is increased slightly to $354.
15 per month, but you will be paying only $12,498.
21; a saving worth over $1,000.
If the monthly payment is too high for you, you can opt for 20 years loan period.
The monthly payment is reduced substantially to $225.
59 per month, although you will be paying $24,140.
67 on interest throughout the loan period.
Depending on your main goal, you can easily use the right consolidation plan to get the benefits.
You can do your own calculations or compare deals provided by the financial institution you are engaging.
Find a reliable consolidation calculator to help you get started right away, and see just how profitable it can be to consolidate your loan.
With more student loans to consolidate, the amount of savings you can make will be greatly increased.
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