Consolidating student loans different interest rates
If you have federal student loans, you can learn about the government’s Direct Consolidation loan that is for federal student loans only.
When it comes to consolidating, you have to weigh the benefits versus what you’re giving up.
Student loan consolidation or refinancing can be a great tool to use for those looking to save on, or simplify, their monthly payments, but going that route can also have serious consequences if not approached carefully – there are even student loan consolidations scams to be aware of.
That’s why we created this guide – to give borrowers a useful resource that empowers them to choose if student loan consolidation is right for them and which type may best suit their needs.
With respect to student loans, consolidation specifically refers to the Federal Direct Consolidation Loan program, which essentially allows you to turn one or more federal student loans into a different kind of federal student loan.
The main reason you would consider consolidation is it may give you access to the best federal student loan repayment plans. On the other hand, refinancing means taking out a new to replace one or more federal or private student loans.
Depending on the structure of your consolidation loan, you may be able to lower your monthly payments or save interest in the long run by paying your loan back sooner.We start by discussing the basics of student loan consolidation and refinancing, and comparing the benefits and drawbacks of federal and private consolidation loans.We then detail a step-by-step guide to using and choosing consolidation loans.It takes borrowers an average of 21 years to repay their student loans, while 28% of students are in default (or miss payments for 270 days or more) within five years of entering repayment.
The picture painted by these statistics is clear: many borrowers are in over their heads with student loan debt and are looking for relief.The last section is dedicated to identifying the best private consolidation loans for those with a few different financial profiles.