Long Term Student Loans

Written by Nicole Madison
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Most federal student loans are considered long term student loans because you can take a maximum of 10 years to repay them. Ten years may seem like a long time, but for students with thousands upon thousands of dollars worth of loan debt, 10 years may not be long enough to repay it all. Student loan consolidation can help borrowers to extend the repayment period far beyond ten years and consequently make loan repayment more feasible.

Consolidating Long Term Student Loans

Consolidation is the process of refinancing two or more student loans and combining them into one big loan. Consolidating allows borrowers to take advantage of interest rate dips and take up to 30 years to repay long-term student loans. Once you consolidate you are still eligible for deferments and forbearances. You can even, in most cases, consolidate while you are still enrolled in school.

Consolidating can save you money by securing low interest rates on your long term student loans. Most federal long term student loans have variable interest rates. In spite of the interest rate cap on federal student loans, this way of determining interest rates leaves you vulnerable each year to increases. When you choose to consolidate you are given a fixed rate of interest on the loan, thus shielding you from interest rate increases. Furthermore, if you consolidate when interest rates are particularly low, you could save thousands of dollars over the life of your loan.

Keep in mind, the longer you extend the repayment of your loan, the longer you will have to pay interest on that loan. By paying your loan back in a shorter amount of time you can save on the total interest paid. However, choosing to repay your loan in a shorter amount of time may make your monthly payments higher and as a result, less manageable. Carefully choose the repayment plan that best suits your financial needs.

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