It is quit true that there are various consequences that a student has to face at the end of month when the time comes for the monthly payment of loans, but there if there is a problem then it also has a solution and the solution for the different kinds of student’s loan payments is Student loan Consolidation. Federal student loan Consolidation is the tool that allows the student to combine the different loans for their studies in a single consolidated loan; this enables the students to look after at just one loan instead of many others. The main reason why the Federal Consolidation Loan is preferred is that it enables the lender to design one schedule for the repayment of all sorts of loans. Whereas, on the other hand the students do not consolidate their loans than they will not only have to make repayments for several loans but ultimately this will also result in a much greater interest rate at the end of time, that means lender will end up paying five to ten times more than the amount of they had originally borrowed.
After having a brief introduction to the subject matter certain pros and cons related to Federal Student Loan Consolidation are being defined as following:
· First and for most thing is that the monthly payments are much lesser.
· Just a single bill is generated on the name of borrower.
· Federal Consolidation Loan does not impose any sort of penalties on the prepayment.
· Interest rate is fixed in the case of Student loan Consolidation.
· Best part is that there is no fixed number of loans that can be consolidated under the title.
However, on the other hand there are certain disadvantages as well which are also related to the Federal Student Loan Consolidation which is listed below:
· Form one consolidated loan results in increasing the duration of the repayment of the loan.
· Student loan consolidated, involves a risk of loss related to incentives of the in progress loan.
Although it is a fact that Federal Consolidation Loan has certain advantages and disadvantages but despite of which it provides far more better solution for the student lenders and eventually enable them to workout the different loans help the students to plan their future in a better way.
