Student loan consolidation can dramatically lower your monthly payments and save you hundreds of dollars each month. Have you ever thought about what you can do with all that money you'll be saving each month? Rather than spending your extra money, why not save and invest it? This article shows some of the ways that you can put your extra money to good use.
Student loan consolidation is more beneficial than you might think. First of all, you will get a fixed rate and protect your from rate changes that can go as high as 8.25% on federal student loans. You'll have one lender and one monthly payment, streamlining your repayment obligations and giving you less of a headache. You'll also be able to extend your loan up to 30 years, which in effect will dramatically lower your monthly payment and save you hundreds of dollars each month. But the benefits of student loan consolidation continue. Have you ever thought about what you can do with all that money you'll be saving each month? Why not save and invest it? Rather than spending that extra money each month, make that extra money work for you. Below you will find just some of the ways you can put that extra money to good use.
Emergency Fund
The money you save each month should first go into an emergency fund. Job loss, a natural disaster, an injury, or any other life crisis-they all require cold, hard cash. Unexpected emergencies can be expensive and, if you are unprepared, detrimental to your financial plans. The money in your emergency fund should only be available when there is no other way to pay for something that is a necessity. You should save enough cash to cover three to six months of expenses. Your emergency fund should be kept separate from other investments or savings. Most important, an emergency fund must be available at a moment's notice, so think liquidity and safety. And remember, your emergency fund should only be used for real emergencies!
Bank and Credit Union Savings Accounts
While a savings account has a low interest rate, it is your safest bet, as the federal government insures savings accounts and certificates of deposit. The drawback is your money will grow slowly. Nevertheless, bank and credit union savings accounts are good places to store your emergency fund because they are liquid accounts and you can access the funds quickly. You can also use these types of accounts for short-term goals, such as money for a vacation or a down payment for a car.
Mutual Funds
A mutual fund pools your money with that of other investors to buy shares
It?s July 23rd, Do you know where your loans are?
Did you know that because nearly all private student loans have variable APRs, your interest rate could have changed several times in the past 2 years?<img src="http://feeds.feedburner.com/~r/StudentLoanConsolidationHotTopics/~4/W35fIg6RTdE" height="1" width="1"/>
Confused about reform and consolidation?
If you’ve heard the word about the reform currently in progress across the country, you probably are aware of the end of the FFEL program and exclusive federal consolidation returning to the Department of Education. If not, read this page on upcoming changes to get acclimated.
One question we get a lot is, “If FFEL is [...]<img src="http://feeds.feedburner.com/~r/StudentLoanConsolidationHotTopics/~4/gtij4UUkuQQ" height="1" width="1"/>
New Grads, Start Thinking About Consolidation
Consolidation has two main benefits that can be of enormous financial help to you both in the present and the future: the improvement of your credit rating and lower net monthly payments.<img src="http://feeds.feedburner.com/~r/StudentLoanConsolidationHotTopics/~4/IRMnvwwn14w" height="1" width="1"/>
What NOT to do when Consolidating your Student Loans
There are a great many benefits to consolidating your student loans, such as the convenience of making one or two monthly payments as opposed to six or seven, the lower monthly payment. But there are some cases where you have to be careful.<img src="http://feeds.feedburner.com/~r/StudentLoanConsolidationHotTopics/~4/hVsxcx5MHFg" height="1" width="1"/>
Graduating? Consider student loan consolidation.
Depending on the amount (and type) of loans you took out for school and the repayment plan you selected, the monthly payments may still be out of your reach by the end of your grace period.<img src="http://feeds.feedburner.com/~r/StudentLoanConsolidationHotTopics/~4/TfWhN3LYYvM" height="1" width="1"/>
Should I Consolidate my Private Student Loans?
Federal student loan consolidation is fast, easy, free and highly recommended to lower your monthly payment. Private student loan consolidation is a bit trickier. Here are some notes to remember if you choose to go down this road.<img src="http://feeds.feedburner.com/~r/StudentLoanConsolidationHotTopics/~4/pI-n1mZXjYQ" height="1" width="1"/>
How to Get Your Student Loans Forgiven
Imagine waking up tomorrow and discovering you don't need to pay back your federal Stafford, PLUS and Perkins loans. For many Americans, that dream is a reality, thanks to a number of programs that allow you to have some, if not all, of your loans forgiven.<img src="http://feeds.feedburner.com/~r/StudentLoanConsolidationHotTopics/~4/_jiatW1gU4M" height="1" width="1"/>
From Our Forums: Consolidation Question Quartet!
There was a great question in our loan consolidation forum this week from a new user with lots of loans from medical school. James recently finished his Master’s degree as a physician assistant (congratulations!) and wrote to us looking for some consolidation advice:
I have the following types of federal loans:
Subsidized Stafford
Unsubsidized Stafford
Grad PLUS
Previously consolidated federal [...]<img src="http://feeds.feedburner.com/~r/StudentLoanConsolidationHotTopics/~4/VhRoT8EQlBg" height="1" width="1"/>
Have a Consolidation Question?
If you aren’t already familiar with our Financial Aid Forum, it is an awesome resource for answering questions about virtually every kind of financial aid or loan a student can take out toward their education.
We have three dedicated Student Advocates (myself included) that are available Monday-Friday to help out and an informed user base of [...]<img src="http://feeds.feedburner.com/~r/StudentLoanConsolidationHotTopics/~4/fVbQFYIEPhQ" height="1" width="1"/>
Did you know you can get IBR on a Federal Loan Consolidation?
It’s true! If you are unfamiliar with Income Based Repayment (IBR), I would recommend reading my blog and then consulting the Student Loan Network’s handy payment estimator chart under the new repayment plan.
Why is IBR better than the normal plan?
There are a couple reasons why. First, IBR takes your income into account when it computes [...]<img src="http://feeds.feedburner.com/~r/StudentLoanConsolidationHotTopics/~4/2ZG78P0peWg" height="1" width="1"/>
of stocks and/or bonds of many different companies. If the stock market goes down, the value of the mutual fund also may go down. On the flip side, your mutual fund will earn money when the stock market goes up. Mutual funds are not insured by the federal government; thus, this type of savings does have its risks. However, mutual funds have a higher return rate than a regular savings account; so you will make more in a shorter amount of time. Mutual funds are a good way to save up for a college fund for your kids, for example.
Individual Stocks and Bonds
Stocks and bonds are higher-risk investments, but they yield higher profits. When you buy a stock, you become part-owner of a company. Your investment will rise or fall according to how well the company does. Companies distribute a portion of their profits to shareholders as dividends. When you own a bond, you have made a loan to a company or government unit. In return, the borrower will pay back the principal borrowed, plus interest. If you are thinking about this type of investment, it is best to seek out the help of a financial advisor before committing your money to one venture or another.
Student loan consolidation is the first step towards a secure and prosperous financial future. Use the money you save each month on your loan payments to save and invest.
For more information visit http://www.edfed.com
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