Consolidating federal student loans lower interest rate
Student loan consolidation is the process of taking multiple outstanding loans and reorganizing them into one monthly payment.
Consolidation loans like the Stafford Loans, for example, can help make this possible with Direct and Federal Family Education Loan (FFEL) consolidation programs.
If you can handle your monthly loan payment as is, carefully investigate how consolidating will change the total amount you’re expected to repay.
You can get a consolidation loan from any private lending institution with government approval, or from the Department of Education itself. Some offer favorable terms like interest-rate reduction for making on-time payments or choosing automatic withdrawal; others may offer repayment plans that better suit your financial situation.
Plus, consolidating could make it impossible for you to have a Perkins Loan forgiven or reduced.In those cases, you may be able to have another go at it.The following types of loans are eligible for consolidation: Yes, a married couple can jointly consolidate their loans, but it may not be a good idea.For any college grads overwhelmed by multiple student loans, this can be extremely helpful.The difference between student loan consolidation and refinancing is a subtle distinction but no less important.
The key terms for federal consolidation loans do not vary by lender: no application or origination fees are allowed and there are no prepayment penalties.