Consolidating student loans can be tricky, and several factors need to be taken into consideration when making your decisions.
But if you decide that the benefits of consolidation outweigh the drawbacks, you can find a way to make it work, whether you have federal or private loans.
Variable means that the interest rate can increase at any moment.
If you are consolidating both types of loans, you should make sure to keep them separate.
Consolidation is usually synonymous with federal consolidation, although some private lenders offer consolidation loans as well.
Federal consolidation combines multiple eligible federal student loans with various repayment schedules into a new federal loan with a single monthly payment.
However, if you take longer to repay your loan, you’ll pay more interest over the life of the loan.
By paying more than the minimum monthly payment, you can pay off your loan more quickly and reduce the total amount of interest over the life of your loan. With a consolidated loan, a graduate pays 6 less per month, but pays an additional ,363 in interest over the life of the loan.
The Direct Consolidation Loan application will include estimated repayment information under eligible repayment plans. Find more at the consolidator estimator at My Fed and additional calculators below, or at your loan servicer’s website: To qualify for a Direct Consolidation Loan, you must have eligible loans — such as at least one direct loan or Federal Family Education Loan (FFEL) — that is in grace, repayment, deferment, or default status.