Boston Loan Consolidation Attorney

Consolidating Student Loans

Roughly 50% of all recent college graduates have taken out some amount of student loans. The average amount borrowed is around $10,000. In recent years, interest rates have fallen to very low levels. Stafford Federal Loan interest rates were between 3 and 4%. While this is low, consolidation rates can be much lower. They can be less than 2%. While this is great, a person must meet some very specific requirements. One of those is good repayment history.

As in any debt, student loans can influence a person’s credit and future financial options and decisions. Students who borrowed a substantial amount for their undergraduate degree, more than $5,000, are much less likely to pursue higher education. In addition, student loan debts whose monthly payments amount to more than 8% of a person’s income are viewed negatively when a person’s credit is assessed for future loans.

There are two main ways to reduce a debt burden. They are:

• Reduce or eliminate the principal balance
• Reduce the monthly payment

Some types of student loans can be forgiven by service or other higher education. This eliminates the principal balance. Reducing a monthly payment will lower the debt burden. Debt burden is measured by comparing loan payments to income. Reducing a payment helps with credit evaluation.

School loan consolidation is a practical tool for repaying loans. It refinances all school loans into one loan. This reduces the monthly payment. Part of the benefit is that there is only one interest charge that is accruing, rather than multiples.

Consolidating federal student loans can reduce a monthly payment by up to 53%. Eligibility for student loan consolidation is determined by a number of factors. These include:

• No longer being enrolled in school or being enrolled less than half time
• Must be in the “grace period” of the loan or must be repaying the loan
• A minimum loan amount of at least $10,000 is typically required

Contact a Boston Bankruptcy Lawyer

If you are facing a personal financial crisis, contact the Boston loan consolidation lawyers of Joshua Spirn & Associates at 1-800-975-5346 to discuss your situation and to determine your legal options.