You need to think through carefully, do your research, speak to the lender and evaluate the pros and cons so that you know for sure that you are making the right decision given your circumstances. This can go on for several years after you graduate from college. LendKey is another option to check into. You can choose an income-based plan and pay off the loan faster: You may consolidate with Direct Loans during grace periods , once you have entered repayment, or during periods of deferment or forbearance. Pros of Consolidating Student Loans You combine multiple federal student loans into one: Whereas when you consolidate your federal loans with a Direct Consolidation Loan , this only combines your federal loans together without reducing your interest payment. Some consolidation plans may offer you the option to choose flexible repayment terms. However, the interest rate may be greater than 8. Done this way, you will eventually pay a much higher amount than you would have had to pay if you had not consolidated your loan. Choosing a variable rate for your student loan can be riskier; since rates can go up anytime, but it can also land you a lower interest rate. Both borrowers had to agree to be jointly and severally liable for repayment.
What Is Student Loan Consolidation? This makes it easier to remember and allows you to stay ahead of your payments. Both lenders offer lower interest rates, flexible terms and perks. The electronic application consists of five steps: Joint Consolidation Loans Prior to July 1, , married borrowers could choose to consolidate federal student loans from both spouses or jointly consolidate the loans of either spouse. Consolidation might help you if you need to reduce payments on your loan through an extension of the repayment period. Another way a refinancing saves you money is because it can extend the duration of your loan. It is a good idea to do this even if you just think that you might want to use the public service cancellation program. If you consolidate your federal student loans and the new term is extended over a longer time period, you will inevitably end up having to pay a higher rate of interest overall. Further, borrowers with joint FFEL consolidation loans, according to the Department, may not reconsolidate into Direct Loans and therefore are not eligible for public service loan forgiveness. Where to Get Your Student Loan Refinanced You can refinance your student loan through many private lenders, including your local bank or credit union. If thoughts and questions about your college loan repayments stress you out constantly, you are not alone. Also, federal consolidation loans generally have lower interest rates. You may consolidate with Direct Loans during grace periods , once you have entered repayment, or during periods of deferment or forbearance. Extending the length of repayment increases the total amount you have to repay over the life of the loan. No more spending all your free time keeping track of when to make each payment and how much to pay. Some consolidation plans may offer you the option to choose flexible repayment terms. You'll Have One Monthly Payment Keeping track of several different student loan payments, on top of many other bills, can be frustrating. This amount is typically added on to the total balance of your loans, which will end up increasing your total debt. It can be bewildering at first as you try to figure out how to keep track of your various student loans, each with their own repayment terms , interest rates, and penalties for late payments. As you weigh the pros and cons, keep in mind that timing is critical. In most cases, when you consolidate your federal student loans , you end up having to pay a much lower rate of interest than the combination of the original loans. This is most clearly a problem if you consolidate federal loans into a private consolidation loan you would lose the rights associated with federal loans. Both lenders take a more modern approach at student loan refinancing. However, if you have private loans, you may want to think about consolidating these loans into a new private consolidation loan. However, before you refinance your loan, take a better look at the pros and cons of refinancing. For many graduates, student loan consolidation is a good idea but that does not necessarily mean it is right for you.
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