Consolidating student loans advice

A Direct Consolidation Loan has a fixed interest rate for the life of the 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 result is a single monthly payment instead of multiple payments. Leaving out your Direct Loans or Perkins Loans will preserve the benefits on those loans.

Loan consolidation can also give you access to additional loan repayment plans and forgiveness programs. If you want to lower your monthly payment amount but are concerned about the impact of loan consolidation, you might want to consider deferment or forbearance as options for short-term payment relief, or consider switching to an income-driven repayment plan for longer-term payment relief.

To do this, many or all of the products featured here are from our partners. Private consolidation is often referred to as refinancing.

These processes are often confused, but they’re very different. refinancing Private student loan consolidation, or refinancing, means replacing multiple student loans — private, federal or a combination of the two — with a single, new, private loan.

Private education loans are not eligible for consolidation, but for some Direct Consolidation Loan repayment plans, the total amount of your education loan debt—including any private education loans—determines how long you have to repay your Direct Consolidation Loan.

Direct PLUS Loans received by parents to help pay for a dependent student’s education cannot be consolidated together with federal student loans that the student received.

Federal loan consolidation doesn’t have a credit requirement, and it offers the benefit of a single loan bill and potentially lower payments.

There is no cap on the interest rate of a Direct Consolidation Loan.

Repayment of a Direct Consolidation Loan will begin within 60 days after the loan is disbursed (paid out).

You’re generally eligible once you graduate, leave school or drop below half-time enrollment.

Consolidating your federal loans through the Department of Education is free; steer clear of companies that charge fees to consolidate them for you.

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