How to Lower the Cost of Your Student Debt Loan Consolidation Flexibility is one of the advantages of going for loan consolidation. You have some leverage on the repayment schedule to go for with a debt consolidation loan. You can arrange the monthly payments according to your means. For example, you can extend the term period so that you can pay it off gradually. You’ll obviously be searching for ways to make your payments for debt consolidation loan as cheap as possible. You can make your student loan consolidation payment affordable by following the tips below: Shop Around Unless you can make your monthly payments cheap, there is no point in taking a new loan. Before you consolidate your multiple debts, shop around for a loan with the lowest interest rates. Choose a lender that offers affordable payments terms as well as interest. Local credit unions may offer better rates on a loan than a bank. You can also ask your preferred lender to lower your interest rate. Extend the Loan Term
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Your monthly payments will be cheap if you extend the time period for loan repayment. However, remember that this may increase the total interest to be paid.
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Be Consistent With Your Monthly Payments If you want to keep your loan consolidation cheap, it is important to make payments regularly. If you do not make the monthly payments on schedule, you risk being penalized. The loan consolidation may end up being expensive if you have to pay additional penalties for missed payments. Consider Home Equity Line Of Credit You can also tap into your home equity to keep your student debt loan consolidation cheap. This option allows you to tap in your home equity and borrow against that. Generally, the first payments for the home equity consolidation loan are affordable since they only have to cover the interest of the loan. Another benefit you will enjoy is tax refunds since the payments made on a home equity line of credit are deductible. However, like is expected, your home must have accrued equity for you to qualify for this loan. A home equity loan just combines all your unsecured debts and transforms them into a secured one. You’ll need to be careful if you plan on taking the credit since it involves a great risk. For example, there is the possibility of losing your home if you are unable to pay back the loan. Apart from this, your payments will go up after you have finished paying the interest rate since you will then be required to pay the principal. Apart from the above mentioned ways, you can also go for unconventional routes to get a cheap debt consolidation loan. Consider borrowing from your friends or family since they might be sympathetic enough to offer you low interest rates.