Reviews consolidating student loans
A common scenario is a graduate who has Federal student loans but is just on the standard repayment plan.
If your Federal loans are at 6.8%, and you aren’t taking advantage of any of the special repayment plans, you may benefit by consolidating to a private student loan with a lower interest rate.
However, several banks and services do allow you to combine your Federal and private loans into one payment.
Depending on your post-graduation experience, it may make a lot more sense to combine your loans.
For example, a ,000 Federal student loan at 6.8% will cost a borrower ,619 to repay – ,619 in interest.
By contrast, if that student refinanced into a private student loan, they could significantly lower their interest rate and monthly payments.
If you don’t meet the requirements of a certain lender, a creditworthy cosigner can increase your approval odds and help you receive a lower interest rate.
(Note: When mentioning student loan refinancing throughout this guide, it is implied that consolidation can be a part of the same process.) Both private and federal student loans can be refinanced with a private lender.
According to Student Aid.gov, the following types of student loans are eligible for consolidation: • Direct Subsidized Loans • Direct Unsubsidized Loans • Subsidized Federal Stafford Loans • Unsubsidized Federal Stafford Loans • Direct PLUS Loans • PLUS Loans from the FFEL Program • Supplemental Loans for Students (SLS) • Federal Perkins Loans • Federal Nursing Loans • Health Education Assistance Loans • Some previous consolidation loans When you The interest rate will also be fixed at the current Federal Direct loan rate.
You are eligible for any “Direct” repayment plan – and you can setup a timeline from 10 to 30 years to pay back the loan.
Going back to our original situation, you could still refinance your private student loans and consolidate your Federal student loans through the Direct Consolidation program.
That way, you could take advantage of the lower rates potentially offered through a private student loan refinance, while still maintaining your benefits on your Federal student loans.