Consolidating federal student loans good idea
As a holder of student loan debt myself, my interest is always piqued when I see an opportunity to ease the burden of student loan debt.
That being said, I’ll be the first to admit that I was a bit skeptical when I first heard about student loan consolidation.
Most graduates leave school with a number of different student loans, racked up throughout their years in college.
You can use this program even if you took federal loans through a private lender, but you can not consolidate federal loans with private loans.
This simplifies your financial situation and makes it easier to keep track of loan terms, payments, and other information you need to know.
Other benefits of consolidation could include securing more favorable interest rates (if you also refinance) and lower monthly payments (by extending the repayment term).
Federal student loans are usually consolidated through the federal government and the interest rate is calculated by using weighted average of all the federal loans being consolidated.
Private student loans (and occasionally federal student loans) are consolidated by private lenders and the new interest rate offered will be dependent on your credit score. Check your rate using Ready For Zero's free debt consolidation tool.
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When you consolidate your debt, you combine all those loans into one.