Benefits of consolidating your student loans
Use our Private student loans are not eligible for consolidation through a federal Direct Consolidation Loan, but you can consolidate your private student loans by refinancing with a private lender.With numerous banks offering student loan refinancing, choosing a lender can be overwhelming.Each borrower’s financial situation is unique, so only you can say whether consolidating your student loans is a good idea for you.Knowing the pros and cons of consolidation can help you make a decision.Before you jump head-first, it's important to understand how student loan consolidation works. Consolidation works by combining several several loans into a single monthly payment.If you have federal student loans, you have two options for consoldation: through a Direct Consolidation Loan or by refinancing through a private lender. This not only simplifies your student loan repayment, but it can also lower the monthly amount you pay toward student loan debt.If you have private loans, or a mix of federal of private, you can consolidate by taking out a new loan through a private lender. Because consolidation works a little bit differently depending on which types of loans you have, we are going to tackle consolidation from several different angles: However, it's important to know that the interest rate on your Direct Consolidation Loan is not always lower.Instead, the rate is calculated by taking the weighted average of the interest rates on your existing loans and then rounding up to the nearest one-eighth of 1%. So, i the Federal Loan Consolidation Information Call Center at 1-800-557-7392.
For instance, consolidating your student loans through a federal Direct Consolidation Loan could lower your monthly payments in the short-term if you extend your repayment term, but you may end up paying more over the life of the loan than you’re paying under your current plan.Like federal consolidation, refinancing allows you to combine your loans intotake this 7-question quiz to find out.Now, since there isn't just one option as with consolidating through the federal government, you need to compare lenders before applying.The truth is you can't consolidate private student loans through the federal government.Instead, you consolidate your loans refinancing through a private lender.