Consolidating Student Loans or Student Loan Forgiveness?

What Works Better: Consolidating Student Loans or Student Loan Forgiveness?

When it comes to repaying student loans, many borrowers feel like they’re stuck with no way out. There are, however, multiple student loan repayment options that can be beneficial if borrowers understand what they are getting into.

Before signing on the dotted line for a student loan repayment plan, you should know what your goal is. For every student loan repayment option, there are advantages and disadvantages. The main goals of student loan borrowers considering student loan repayment options are often:

  • Lowering their interest rate
  • Lowering their monthly payment
  • Payment flexibility

If you feel like you’re drowning in student loan debt, understanding options for repayments such as refinancing, consolidation, and forgiveness is the best place to begin.

What are Low-Interest Student Loan Refinancing Options?

Refinancing student loans is the most common and practical solution for improved student loan payments. The most notable benefits of student loan refinancing include:

  • Lowered interest rates
  • Lower monthly payments
  • Smaller total repayment amount
  • No fees

One of the biggest attractions of student loan refinancing is that if you’ve already refinanced your loans, you can do it again. There is no limit on the number of times you can refinance your loans.

Right now, there are numerous student loan refinancing companies on the market. When applying to refinance a student loan, you will need to be able to show regular income, a good credit score, and a low debt-to-income ratio.

Student Loan Consolidation Benefits

Many people believe that student loan refinancing and student loan consolidation have the same benefits. However, they do not. While student loan refinancing options typically help borrowers save money, consolidation serves to manage student loans. With student loan consolidation, individual federal student loans are combined into one student loan with an average interest rate. More often than not, the payment amount for borrowers who choose to consolidate stays the same.

What Are Complex Student Loan Forgiveness Plans?

For most student borrowers, student loan forgiveness is the most attractive option. On the surface, it appears to be a way to eliminate student debt forever without shouldering the burden of any monthly payments. Unfortunately, student loan forgiveness is not an easy option and more than 99% of applicants are denied. Not only are there strict occupational requirements but most plans also require 10 years of on-time payments.

If you want to apply for student loan forgiveness, you should:

  • Research forgiveness requirements
  • Enroll in automatic payments and always ensure your payment is on-time.
  • Send an employer certification form annually

It requires diligence and determination to earn student loan forgiveness, but the end result is worth it.

Eliminate Student Loan Debt With Debt Settlement

If you’ve exhausted your student loan repayment options and can’t manage your student loan payments, it’s time to seek legal counsel. At McCarthy Law PLC, we are debt settlement lawyers who are here to help you eliminate your student loan debt. We will work with you to learn your situation and come up with a plan to manage your student loan debt by making one regular payment and negotiating with your creditors.  We have successfully negotiated settlements for clients across the country to help them avoid bankruptcy.

At McCarthy Law PLC, we provide free consultations, so there is no risk in contacting us to learn the most viable options for resolving your private student loan debt.

For a free consultation, call our office at 855-976-5777 or contact us online today.

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Joe Panvini

Joe Panvini

Joe received his law degree from the Sandra Day O’Connor College of Law at Arizona State University in 2010. On behalf of consumers, he has successfully briefed and argued complex consumer law issues in both individual and class action lawsuits. Joe is admitted to practice in Arizona and Washington, as well as numerous federal courts across the country, including the Ninth and Eleventh Circuit Courts of Appeals.