What to know about consolidating student loans
You can lower your monthly payments and increase your repayment period.Lower monthly amounts, though, mean you pay more over the loan’s life.Loan consolidation may offer just the wiggle room you need, however, if your original loans are more rigid. If you took out federal loans before 2013, you may have one of two types of interest rates: variable or fixed.Variable interest rates can adjust each month, based on the interest rates available at the time.
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.
Once the original loan disappears, you lose those benefits.
PLUS loans, for instance, may have flexible repayment options unavailable after consolidation. But before you make the switch, here’s what you need to know.
Many students and graduates take out multiple loans. If you’re in this category, you’ve probably considered combining all those loans into one—a common process known as either student loan consolidation or student loan refinancing.
Consolidation is the process of combining several student loans into one consolidation loan that retains all the benefits of federal loans: flexible repayment options if you lose your job or go back to school and forgiveness programs after years of service in certain qualifying fields.