Information on private student loan consolidation

Private student loan consolidation offers a person the chance to take advantage of a low, fixed interest rate as well as the convenience of only having to worry about the one loan. Although there are many debt consolidation companies out there and consolidating your debt is often the best advice when it comes to the average person, this is not the case with student loan debt. In fact, the government have made a number of changes to the student loan system in a bid to stop people from consolidating their student loans.

People have what is known as guaranteed entitlement to student loans in the United Kingdom. The government then uses a means tested system to work out how much the student pays back. A student generally does not have begin paying their student loan back until they have reached earnings in excess of £20,000 a year. Of course, private student loans are different and it is often these loans that people try to consolidate. This is because, potentially, people could still be paying back student loans ten years after leaving education.

The biggest concern surrounding private student loan consolidation is that people will group together a bunch of unsecured loans and take out a secured loan to pay them back. Because secured loans are given out secured on collateral, usually a home, this means people are putting their homes at risk of repossession for the sake of paying for an education. Not paying student loans can not make you bankrupt, as stated by the government, however, it can severely affect your credit rating. An attachment to earnings, which sees the loan company paid directly from a person's wages is the most likely scenario.

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