Student loan consolidation: Should you consolidate your loan?
Iif you are in the United States and find it difficult to follow several student loan repaymentsconsolidating these loans into one monthly payment can make things simpler and easier to manage.
Consolidation of the different student loans may also reduce the monthly rate by extending the loan term, but this will result in higher payments overall due to loan interest rates.
Student Loan Forgiveness
You can still access federal loan programs and rebate programs after that, but there’s no way to lower your interest rates.
Another option is refinancing – consolidating federal and/or private loans into one brand new loan.
It may save money if you can negotiate a lower interest rate, but it depends on your credit history.
Thus, consolidation is a strategic decision to reduce the complexity of repayments and concentrate it into a single sum, refinancing can be a way to save money.
Student loan refinancing
Refinancing could turn a profit if you have good or excellent credit – think over 690 and you look good.
If you have a stable job that also helps, or if you don’t know someone close who does and will accept that, then they can co-sign it instead.
You can refinance federal and private loans into one new one, but you cannot consolidate a mixed bag of loans.
When you consolidate, your new interest rate will be a weighted average of all your previous rates, rounded to the nearest eighth of a percent.
You will usually get a new loan term ranging from 10 to 30 years, and this will normally start within 60 days of the loan being granted.
You can find out what your consolidation options are by logging on to studentloans.gov and selecting the loans you want to consolidate – it doesn’t have to be all of them.
Then browse through the repayment plans and pick the one that’s right for you, but remember to read the terms and conditions before agreeing to anything.