Why Student Loan Consolidation is a Viable Route Towards College Debt Clearance

The principal challenge that students face when they finally come out of college is the amount of debt they must pay off. It is often thought that getting a job is the first concern, and while it is certainly linked, finding ways of clearing the mountain of debt is usually what is first in their minds. Student loan consolidation is a favorite way.The size of a college debt can run over $50,000, depending on whether or not summer vacations were spent earning decent money to keep the overall debt down. But managing loan debt, even to that degree, will always involve careful planning, financial discipline and commitment to purpose.As with all kinds of loan products, clearing student loans in this way requires some careful thinking before a final decision can be made. The reason is that consolidating debts in the wrong way can lead to increased financial woes instead of financial relief.Types of Student DebtsIt is important to consider the fact that more than one type of loan is taken out by students during their time in college. There are private and public lending sources, and these can have a definite influence over the student loan consolidation choices to make.Private lenders are banks, lending firms, credit unions and the like, and generally offer loan products that have higher interest rates and varying terms and conditions. In truth, the largest share of the debt comes from this loan sector, so managing loan debt to private lenders is a key part to clearing the overall financial pressure.Public lending products are much less punishing. Provided by federal governments, these are generally available at low fixed-rate interest rates and typically have repayment periods of grace. However, these student loans can lose these same benefits if they are included in a consolidation plan.Why Consolidation WorksOf course, there is little point in turning to student loan consolidation if there is nothing to be gained from it. The fact of the matter is that there are clear benefits to be had for those who take the step to gather their existing college debts together into one loan sum - the loan then used to buy out those individual loans.The principal reason why managing loan debt in this way can be such a good move is that the repayment sum that is due falls, often dramatically. The spread of interest rates on the different existing loans, can together be higher than expected. But by getting everything under one loan and one rate, savings are made.What consolidation means, is that the student loans are bought out, and the combined sum is then repaid often over a longer period of time. Thus, the whole debt becomes far more manageable.Pros and Cons of ConsolidationIt might seem that student loan consolidation is the perfect solution to clearing these debts, and there are certainly enough advantages to put forward a good case. However, there are also some negative aspects to consider. The pros are certainly that interest rates are lower, repayments are lower and the degree of financial pressure is lessened considerably.But amongst the cons of managing loan debt in this way is the fact that the sum of interest repaid over the lifetime of the loan is much higher. This is because the term of the loan is at a maximum - perhaps 30 years - so as to ensure the lowest possible monthly repayments.However, it is hard to argue against the fact that clearing student loans is the primary aim and is certainly accomplished.