Can save money consolidating my student loans
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.By the time graduation rolls around, it’s not uncommon to have four or more student loans!Having multiple lenders, whether federal or private, means you need to be on top of paying your bills every month – otherwise it could hurt your credit score.
But those are two very different things with very different pros and cons.You may be contacted by private companies that offer to help you apply for a Direct Consolidation Loan, for a fee. There’s no need to pay anyone for assistance in getting a Direct Consolidation Loan. The fixed rate is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest one-eighth of one percent. The loans that were consolidated are paid off and no longer exist.Loan consolidation can also give you access to additional loan repayment plans and forgiveness programs. Refer to the complete list of federal student loans eligible for consolidation in the application.There is no application fee to consolidate your federal education loans into a Direct Consolidation Loan. Department of Education (ED) or ED’s consolidation loan servicers. Top A Direct Consolidation Loan has a fixed interest rate for the life of the loan.