If you are a recent graduate and are in a situation wherein you have to immediately start paying your student loans as indicated in your contract, then you might benefit from seeking professional advice such as those offered by companies providing non-profit debt consolidation counseling. You may also wish to check out traditional companies that provide loan consolidation packages that are suited to your specific situation.

Nowadays, school loan consolidation has become the most popular approach in paying off student loans. Although others might say that there are disadvantages, the benefits far outweigh the perceived disadvantages. Here are the top three reasons why debt consolidation could provide you a ticket to a worry-free financial future.

Lower Monthly Payments

When you decide to consolidate your loans, the company or agency will pay off all your existing loans and combine these into one that you will only have to pay to that agency or company. By combining all your loans, you will be able to lower you monthly payments by as much as 54%, depending on the principal amount and loan term. The lower monthly amortization will be due to the fact that loan term will be extended over a longer period of time. This is the main advantage of debt consolidation. With combined loans, you will also be able to lower interest rates by as much as 34%. However, check if the interest rate of your chosen school loan consolidation package is fixed or will increase annually. Since consolidated loan payment schemes could last for as long as 30 years, a fixed interest rate is the ideal option.

Improved Credit Rating

Another way with which school loan consolidation can help you secure a more financially independent future is through the fact that a consolidated loan will help you keep all your loans current, thereby preventing you from incurring defaulted student loans that could gravely affect your credit rating. Moreover, having just one creditor could also spell added points to boost your credit rating. Of course, it is a well-known fact that a good credit standing will allow you to take out necessary loans for future use such as car loans or home mortgages.

Simplified Payment Plan

As you evaluate various companies, including ones that provide non-profit debt consolidation counseling, you will find that they all offer one thing in common: a simplified payment scheme to help you pay off your debts. What a consolidated loan means for most is a more organized debt management program that will allow you to simply handle one loan and communicate with just one company or agency. This will help you avoid the hassles of dealing with multiple collectors and their harassing tactics. Moreover, you will have more time with other important issues you need to address such as regular utility bills, paying the rent, gaining mastery of your new job, and enjoying your life as a professional.

Finally, do not hesitate to ask for the opinion of your relatives and loved ones so that you will not end up signing for the wrong package.