By increasing your loan repayment period, you’ll have more payments to make and will end up paying more in interest.
There are no prepayment penalties with a Direct consolidation loan, so feel free to pay more when you have the extra cash — it’ll help you save on interest. According to the Education Department, federal loans eligible for a Direct consolidation loan include: Subsidized and unsubsidized Direct loans, subsidized and unsubsidized Stafford loans, Direct PLUS loans, PLUS loans from the Federal Family Education Loan (FFEL) Program, Supplemental Loans for Students (SLS), Perkins loans, Health Education Assistance Loans (HEAL), federal nursing loans and some existing consolidation loans.
It also may lower your monthly payments by giving you as long as 30 years to repay.
While consolidating federal student loans may give you a much-needed break on your monthly student loan payments, that lower monthly payment amount comes with a price.
Some spend more money on college debt than they pay for groceries, utilities, or in some cases, even rent.
Many people pay hundreds of dollars each month on college loan repayments.
Yet despite the appeal -- and its popularity -- student loan consolidation isn't for everyone.
Here are some frequently asked questions and answers that may help determine if it's the right move for you.
Perhaps that’s one reason around 7 million borrowers are in default, according to the Consumer Financial Protection Bureau. Consolidating your student loans can be a great way to ease financial strain — and the stress that goes with it. There are repercussions to refinancing that you should know before you sign on the dotted line. When you apply, you select a student loan servicer and a repayment plan (learn more about Any questions you have about your loan application should go to the student loan servicer you selected for your consolidation loan. You can apply electronically or get a paper application.To a college grad swamped with multiple student loans that have come due, loan consolidation is an enticing option.When you consolidate, a lending institution pays off your existing balances and replaces them with a new, consolidated loan.