Federal student loan consolidation basics How to consolidate federal student loans Benefits of federal consolidation Drawbacks of federal consolidation Private student loan consolidation (student loan refinancing) When you consolidate federal loans, the government pays them off and replaces them with a direct consolidation loan.You’re generally eligible once you graduate, leave school or drop below half-time enrollment.
See How Low Your Payment Could Be Understanding Federal Student Loan Consolidation vs Private Student Loan Refinancing Both types of consolidations can lower your payments and reduce the headache of having to keep track of multiple student loans (which can lessen the risk of accidental default), but the similarities usually stop there…
So, for instance: If the average comes to 6.15%, your new interest rate will be 6.25%.
Additionally, you’ll get a new loan term ranging from 10 to 30 years.
Finding the best student loan consolidation provider means taking many factors into consideration.
However, the end goal is the same: getting the needed extra funding without being financially burdened for years to come.