Consolidation doesn’t always result in a lower interest rate, plus lower monthly payments usually means paying the loan over a longer period of time and spending more on interest.You also need to know that the process is different for federal student loans and private loans, especially if you’re trying to manage each.With the new loan, you could be eligible for income-driven repayment plans and possibly even forgiveness programs that you weren’t able to use prior to consolidating.You can also enjoy the benefits offered by consolidating any debt, such as one, single payment and potentially lower monthly payments.Private lenders may be able to consolidate both private and federal loans, but you cannot roll private and federal loans into one new federal Direct Consolidation Loan.
Other benefits of consolidation could include securing more favorable interest rates (if you also refinance) and lower monthly payments (by extending the repayment term).
When you choose to consolidate your federal student loans, the government will combine all your separate loans into a single new loan, known as a Direct Consolidation Loan.
Most federal student loans are eligible for consolidation, including subsidized and unsubsidized Direct Loans, subsidized and unsubsidized Federal Stafford Loans, Direct PLUS Loans, Supplemental Loans for Students (SLS), Federal Nursing Loans, and Health Education Assistance Loans.
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