Consolidating my college loans

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You’re generally eligible once you graduate, leave school or drop below half-time enrollment.

Consolidating your federal loans through the Department of Education is free; steer clear of companies that charge fees to consolidate them for you.

You’ll save money if your new loan has a lower interest rate.

Your financial history — including your credit score, income, job history and educational background — will dictate your new interest rate when you refinance.

You can opt out, but you’ll have to submit a copy of your most recent federal tax return directly to your loan servicer after you finish the consolidation application.

The remainder of the application involves filling in basic personal information and providing names of two references who have known you for at least three years.

Ideally, that new debt has a lower interest rate than your existing debt, making payments more manageable or the payoff period shorter.

Options to consolidate your credit card and other debts include a balance transfer credit card, an unsecured personal loan, a home equity loan or line of credit and a 401(k) loan.

Your repayment term will generally start within 60 days of when your consolidation loan is first disbursed and will be based on your total federal student loan balance, among other factors; click on the link below for more details.If your loans are already with one of those servicers, you can stay or choose a new one.On the standard repayment plan for direct consolidation loans, you’ll make equal monthly payments for 10 to 30 years, depending on your total federal student loan balance.After you review, sign and submit your application, continue making payments on your existing federal loans until your application has been processed.If you have problems with or questions about any part of the application, you can call Federal Student Aid’s Loan Consolidation Information Call Center at 1-800-557-7392.

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