Debt Consolidation Student Loans
Student loan consolidation is a practical repayment tool that combines all your student loans into one master loan. Refinancing your student loans will reduce the pressure of multiple payments and allow you to budget your finances with less pressure. People often apply for a debt consolidation student loan to secure a lower or fixed interest rate, for the ease of managing only one loan, and to lower their monthly payments.
Programs for Federal and Private Loans
Debt consolidation student loans are divided into Federal Student Loan Consolidation loans and Private Student Loan Consolidation loans. Generally, these loans cannot be consolidated together because the interest rates differ on both types of loans, and private lenders are not willing to consolidate with federal loans. For federal student loans, the Department of Education purchases existing loans, and the consolidation interest rates are based on that year’s student loan rates. The interest rate on private consolidation loans is based on your credit score, and you may be able to get a lower interest rate if your credit score is strong, or if you have a good co-signer on the loan. Most borrowers can reduce their monthly payments by extending the repayment terms of their private student loan debt.
Nearly 50 % of all college students graduate with private or federal loans, and the average US student leaves with at least $10,000 in debt. Virtually any debt can be overwhelming for recent graduates, which makes debt consolidation student loans a smart and often necessary choice for students in need of financial help. Federal loan consolidation tools could save you hundreds if not thousands of dollars by lowering your interest rate, though you do need to take into consideration the cost of extending your repayment process. If you would like to consolidate your private student loans, you should examine your private student loan options by using our loan comparison tool above. Take care to remember that all private lenders offer differing terms to some extent, and have limitations on the amount of total debt you can consolidate.
When you consolidate your student loans, you invariably end up paying much less than what you were paying earlier: you are saving money and effectively simplifying your life by consolidating your debt. Federal consolidation loans offer superior benefits and lower interest rates, and with a lower monthly payment, you will have more money available to meet other living expenses including housing and career related necessities. Borrowers with improved credit may often lower their interest rate for private loans. A Debt Consolidation Student Loan program offers extremely flexible repayment plans that can be extended up to thirty years. With so many benefits of getting a student loan consolidation, it is a fairly obvious choice to consolidate your student loans: just ensure that increasing the repayment period does not offset the benefits of reducing your interest rate.
Debt consolidation for student loans comes with a variety of benefits: after getting your loans consolidated your interest rate is likely to be lower. Furthermore, consolidation will reduce the hassle of multiple repayments. By combining all loan payments into a single payment, you can effectively and conveniently manage your debt payment schedule.
Is private student loan debt consolidation possible for federal programs?
No, it is not possible to get your private loans consolidated in federal consolidation programs, as federal consolidation programs are only designed to consolidate federal loans. For private loans, you must seek a private consolidation company.