Us department education consolidating student loans
Some consolidation plans allow you to base your repayment on your income.The interest rate on your new consolidated loan will be the weighted average of interest rates on loans you choose to consolidate, and will be fixed for the life of the loan.Lower Monthly Payment Consolidation loan monthly payments are lower because the repayment period is longer.Loss of Deferment and Forgiveness Benefits You may not be eligible to receive the same deferments on your Consolidation Loan that you were eligible to receive on your original loans.While you are not allowed to consolidate private loans into a federal consolidation loan, avoid the temptation to consolidate your federal loans into a private consolidation loan; you may lose some valuable benefits available in federal student loan programs.
This means the total cost of repaying the loan will be higher after consolidation even though your payment per month may decrease.
If you just want to reduce your monthly payment, discuss the federal loan repayment options available with your loan serviser. Single Payment If you have loans with multiple servicers, you send a monthly payment to each.
However, if you consolidate all those loans, you make a single payment to one loan serviser.
This reduces the size of your monthly payments by extending your repayment period for 10 to 30 years, depending on your total debt.
Other loan consolidation programs are available from participating private or state lenders (such as banks, credit unions and savings and loan associations), guarantee agencies, the Student Loan Marketing Association and other secondary markets.