Re consolidating student loans

26 Apr

Consolidating those loans into a single new one can simplify your payments, especially if your loans are with different loan servicers, the companies that oversee your payments.

It can also be a way to get into repayment plans you otherwise wouldn't be eligible for.1. One of the myths of consolidation is that it makes your debt less expensive by lowering your interest rate.

Even if your rates seem high, t he Department of Education puts a cap on consolidation loan rates at 8.25 percent.

One major advantage of federal consolidation loans is that borrowers don't need a stellar credit score to qualify, they can apply any time (even if their loan is in default) at Loan gov, and they'll always get a fixed interest rate.

Interest rates on student loans usually vary by loan type, rate type, and credit worthiness.

If you find yourself paying 4% to 10% in interest each year, you are paying too much.

Student loan refinance rates can be as low as 2.43%.

Keeping track of that many payments is complicated and part of the reason that 8 million Americans have defaulted on over 0 billion in student loans That is why student loan consolidation appears as such an attractive solution, but there are things you should know as you consider this approach.

College students can take out new loans each year they're in school, so by the time graduation comes, it's common to have half a dozen, or more, individual loans.

Each of them may have different terms, including interest rates.

It is not unusual to owe money to 8-10 separate lenders, maybe more if you had a combination of private and federal loans.

If you continue borrowing for graduate school, it’s easy to add another 4-6 lenders to the mix.