Consolidating loans advice elan dating service
The initial interest rate (when you first sign on) may be higher.
Say you have pre-2013 federal loans with variable rates.
If your life circumstances are changing, you may want to adapt your loan repayment plan to match.
For instance, if you’re on a ten-year repayment plan with your original loans, consolidation could get you an extension or offer the income-contingent payback plan.
Make sure you know the borrower benefits of your original loan before you consolidate.
These include rebates, loan cancellation benefits, and interest rate discounts.
Compare your current monthly payments to what the payments would be if you consolidated.
(The Federal Loan Consolidation Program doesn’t require a minimum.) If short-term savings are your priority, consolidation is worth a look.
Consolidation will allow you to switch from a variable rate to the new fixed rate. A variable rate can save you money if you have strong credit – and if interest rates don’t rise significantly.
If you plan to repay loans over time, and you’d rather have a steady interest rate than a fluctuating one, a fixed rate may work best for you. For long-term savings, it’s best to lock in a fixed rate when interest rates are low. The Federal Direct Consolidation Loans website offers an online calculator to compare interest rates. If you have private loans, they won’t be covered under the Bipartisan Student Loan Certainty Act, but you can still lower your interest rate through consolidation.
Loans combined into a Direct Consolidation Loan can’t be removed. Also important to know: you can’t consolidate private student loans with federal student loans.
Fewer payments every month may sound like a no-brainer, but consolidation’s not best for everyone. If you want to roll private and student loans together, you’ll need to explore refinancing your student loans.