You have done the time. You have paid your dues. You’ve already spent the endless nights with a box of pizza and the coffee, your brain running a marathon all night long. You are finally one of those people with that piece of paper in your hand that proclaims (In old English lettering) you know your stuff. You are a college graduate. You are going to show the world your brilliance.
But then reality sets in. You sit in front of a prospective employer who calmly states that you have no actual experience (What?! you think. For my Economics class final, I balanced the budget of the United States!). So you accept the position in the mail room, become the gofer, the assistant’s assistant....you get the picture. In the meantime, your six month grace period for your student loan is creeping up on you and the deadline to pay back three loans you took out to finance your dream will be upon you sooner than you will work your way up.
Consolidation of your loans may be exactly the light at the end of the black tunnel that you need to survive the post-college blues. Many reputable financial aid websites now offer a student loan consolidation calculator, which help you to figure out how to combine all the loan fees that you have collected over the years, and slip them all into one lower monthly payment.
Most student loan payment calculators compute an estimate of the condition of your loan payments and the annual salary required to manage your loans without slipping into financial oblivion. A student loan consolidation calculator usually assumes that the interest will be constant through the life of the loan. Many student loans, including the Stafford and PLUS loans, maintain a variable interest rate, so when using a student loan consolidation calculator, use the current maximum rates available so you do not underestimate your consolidation payment. The current interest rate for a Stafford Loan is 8.25%. The PLUS loan carries an interest rate of 9%. Perkins loans have a fixed interest rate of only 5%. While most student loan consolidation calculators assume that the loan will be paid off in equal monthly installments, the results may vary for some alternative repayment plans, such as graduated repayment and income contingent repayment. Some educational loans have a minimum monthly payment expected, which is typically calculated at $50 for Stafford Loans, $40 for Perkins Loans, but zero for a PLUS Loan. If you enter a higher figure for the minimum payment field, you will obviously pay off your loan faster and the student loan consolidation calculator aids you to determine how much money you could save by doing so.
Consolidation loans extend your loan over a period that is longer than ten years, so that you are able to financially survive while you are working your way up. While, in the long run your costs may be greater than if you paid the loan off during the suggested ten year period, consolidating your loan will help keep your credit sparkly clean because you will be able to afford the monthly payments.