Consolodating student loans
Even if your rates seem high, t he Department of Education puts a cap on consolidation loan rates at 8.25 percent.One major advantage of federal consolidation loans is that borrowers don't need a stellar credit score to qualify, they can apply any time (even if their loan is in default) at Loan gov, and they'll always get a fixed interest rate.The eligible loans listed on the application are paid off by the consolidation loan.The application may be completed online, on paper, or over the phone (restrictions apply).Most of the current deferment and forbearance provisions of Direct student loans are retained after being consolidated.Specific deferment options include: Repayment terms range from 10 to 30 years, depending on the amount being refinanced.
Loan consolidation is when a borrower takes out a new loan to pay off several smaller student loans.Let’s look at an example of getting a federal consolidation loan— FEDERAL CONSOLIDATION LOAN GOV you can also get a private consolidation loan PRIVATE CONSOLIDATION LOAN BANK if you have private loans, but we’ll get to that in a minute.Let’s say you have fifty thousand dollars in federal loans.Essentially what happens when you consolidate BANK is that all of your original loans are paid off by your lender and replaced with a single new loan with new terms.STUDENT LOAN And you can often get a lower monthly payment 0, 10 YEARS, PRINCIPAL, INTEREST because you will have a longer repayment period— 0, 25 YEARS so there are some trade-offs to keep in mind.
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If you’ve recently graduated from college and have student loans, you may have heard about loan consolidation. It’s possible that you have multiple loans from different sources such as federal student loans and private student loans.