Consolidating private student loans advice

You may be contacted by private companies that offer to help you apply for a Direct Consolidation Loan, for a fee. There’s no need to pay anyone for assistance in getting a Direct Consolidation 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 loans that were consolidated are paid off and no longer exist.

allows you to consolidate (combine) multiple federal education loans into one loan. Top 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.

The result is a single monthly payment instead of multiple payments. 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.

Consolidating private loans into a private consolidation loan may be a good idea if you get a better deal.

Like federal consolidation loans, private consolidation loans combine your existing private student loans into one larger loan – you are replacing your original private student loans with this new loan.

It is quite common for people with student loans to deal with 10-12 lending institutions, which means 10-12 payments and 10-12 due dates each month.

When you consolidate student loans – either federal or private – it’s one payment to one lender, once-a-month. Loan consolidation for student loans was created to make it easier for millions of borrowers to pay off their debt.

The government has a strong interest in making it possible for students to pay off their educational loans, and at the end of 2012 it instituted a new form of the income-based repayment plan called Pay As You Earn (PAYE).

Loan consolidation can also give you access to additional loan repayment plans and forgiveness programs. Refer to the complete list of federal student loans eligible for consolidation in the application.

There is no application fee to consolidate your federal education loans into a Direct Consolidation Loan. Department of Education (ED) or ED’s consolidation loan servicers. Top A Direct Consolidation Loan has a fixed interest rate for the life of the loan.

The concept of student loan consolidation is simple: you apply for one large loan which will be used to pay off all your existing student loans.

That single loan will be easier to manage, because you’ll only make one monthly payment, and because it has a longer term than your old loans that payment will be smaller than the sum of your current payments.

223

Leave a Reply