| One of the great things about student loans, and | | | | money market fund that has historically earned |
| consolidated student loans in particular, is the low | | | | more than your current interest rate. For |
| interest rate. By consolidating your loans you | | | | example, if your consolidated interest rate is |
| sometimes see a drop in the interest rate by | | | | 6.5%, you'll want to find a mutual fund that has |
| 1-2%. It seems small and insignificant, but if you | | | | consistently returned 10-12% or more. Then you'll |
| follow the tips from this article you can actually | | | | earn 4-5% on your extra money every year. |
| turn that reduction into profits. | | | | And here's the best part: doing it now will allow |
| As mentioned above, consolidated loans typically | | | | compound interest to kick in, so after the life of |
| provide you with a lower interest rate than | | | | the loan you'll have a nice nest egg of profits |
| unconsolidated loans. They also offer repayment | | | | from the money you were expecting to spend |
| plans that can extend for up to 30 years. If you | | | | every month anyway. |
| are a disciplined person who has a little bit extra | | | | And that's not all! Federal student loan interest is |
| money, you can use the money you save on | | | | tax deductible. So you'll be able to claim the |
| payments each month to earn you cash. | | | | interest you pay on those loans every year, |
| Here's how it works. When you consolidate, your | | | | saving you even more money. |
| payments are usually lowered, which means | | | | Keep in mind that while all this sounds great, there |
| there's extra money between what you used to | | | | are risks involved. Although over time the stock |
| pay each month and your new minimum | | | | market has been stable, there is a small chance |
| payment. Instead of taking that extra money and | | | | you could lose your investment or make less in |
| spending it on impulse purchases and fun, it would | | | | returns than you're paying in loan interest. For |
| be a good idea to use it to pay off extra principle | | | | these reasons it's best to seek professional |
| on your loan. This can drastically cut down on the | | | | consultation before making any sort of |
| length of your loan, meaning you'll pay less in | | | | investment. |
| interest. Not a bad idea. But it will only save you | | | | With that said, this method is considered low risk |
| money, not earn it. | | | | and should at least be contemplated if you're |
| In order to earn extra money from your | | | | fortunate enough to have some extra money |
| consolidated student loans you'll need to take that | | | | each month. |
| extra money each month and invest it into a | | | | |