Benefit of consolidating student loans
MORE COMBINED INTEREST But if you happen to have a steady job and have built up a good credit score, you might be able to get a lower interest rate from another lender than your current private loans, @5.4% INTEREST so it might be worth looking into.
So while loan consolidation can make your monthly payments simpler MULTIPLE LOANS LOAN CONSOLIDATION, if you have multiple loans with different interest rates, STUDENT LOAN @ 5.8% INTEREST @5% INTEREST, @5.8% INTEREST @6.75% INTEREST, @7% INTEREST you could end up paying a lot more if you extend your repayment period.
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.
Please also note that such material is not updated regularly and that some of the information may not therefore be current.
DEFERMENT OR FORBEARANCE Now, if you have private student loans, STUDENT LOAN PRIVATE CONSOLIDATION LOAN, BANK you also have private loan consolidation options.
PRIVATE LOAN CONSOLIDATION They work much like a federal consolidation loan, ,000 PRINCIPAL, @5% INTEREST ,000 PRINCIPAL @ 5.8% INTEREST except they also take into account ,000 @ 6.75% INTEREST ,000 PRINCIPAL @ 7% INTEREST your credit score when determining your interest rate.
,000, ORIGINAL PRINCIPAL Now let’s say you want to consolidate these loans.
Under your new loan terms, your loans will be consolidated into one fifty thousand dollar loan— ,000 FEDERAL LOANS and you’ll have one new fixed interest rate, 15000 X 3.5, 20000 X 4.0, 15000 X 5.0 which is determined by taking the weighted average of the interest rates on your previous loans, and rounding up to the nearest 207500 ÷ 50000 one eighth of one percent.