Student Loan Dodgers

If you’ve resolved to get your financial house in order in 2008, a good place to start is by consolidating your student loans If you have college loans that were issued before July 1, 2006, they’re variable interest rate student loans. This variability can destabilize your finances.

A smart move includes consolidating all of your student loans into one payment with a federal student loan consolidation. This will simplify your finances by reducing the number of payments you make each month, and will likely reduce the amount of money you pay each month. Your student loan consolidation will have a fixed interest rate, which means you’ll always know the amount of your monthly payment. If your finances are limited, you can also stretch out the repayment terms of your student loans to get a lower monthly payment.

Reducing the number of payments you make and the amount you pay each month, along with paying a fixed interest rate will help stabilize your finances and will improve your credit rating. As your finances improve, you can also increase the amount of money you pay each month. This will accelerate your student loan payoff and save interest in the end.

On the other hand, student loan debt is tax deductible, so there’s no pressing reason to pay off your student loans early. You can deduct student loan interest whether you itemize your deductions or not. Likewise, there are other tax credits you’re eligible for if you’re still enrolled in school.

If you haven’t already consolidated your student loans, make this one of your financial goals for 2008.