Although consolidation can provide convenience and a number of benefits for a person with numerous student loans, consolidated loans can also charge slightly higher interest rates.
You should fully investigate the consolidating loan and know what you're getting into before making this decision.
If you are successful in getting the new loan, you're then responsible for repaying the one, larger loan.
You can consolidate all federal student loans and most private student loans.
Consolidation offers a way to select among other repayment plans such as the following federal consolidation loan repayment options: .
Lenders will often offer loan holders certain benefits for being a good borrower.
Consolidated public loans under the federal government program are considered paid in full by the new loan.
The program was created to encourage educational pursuits by making otherwise unmanageable public loans practical for repayment and in a timely fashion.(Some savings vehicles may be better than college saving funds, check out .) Each lender has its own minimum loan balance necessary for loan consolidation; however, you do not need to meet any minimum loan balance for loans consolidated under the Federal Direct Consolidation Loan program.Advantages of Consolidating There are several potential advantages to consolidating your student loans including: 1.Private student loans are granted and managed by regular lending institutions – banks, college foundations, various state agencies – and typically charge a higher fixed or variable-interest rate than federally funded loan programs.Private student loans are credit-based, meaning student borrowers with better credit scores will pay lower interest rates than those with lower scores because banks assess the risk of each borrower.If your lender does not provide any benefits, you may want to consider consolidating your loans with a lender who does.