Help on consolidating student loans
This guide provides an in-depth explanation of the differences between federal loan consolidation and private loan refinancing, the pros and cons of each and insight into which options are best for different situations. News compared private lenders to come up with recommendations for different kinds of borrowers.
There are a variety of private lenders that offer student loan refinancing, each with different potential interest rates, loan terms and features. When you consolidate your student loans, you essentially combine multiple loans into one.
If the servicer delays processing, you won’t have to make your first payment until the end of your loan’s grace period. You can submit it online or mail the completed paper application to one of the servicers that manages Direct Consolidation Loans.
The servicer you choose for your consolidated loan will inform you when it pays off the existing loans, at which point you can stop making those payments and start repaying your Direct Consolidation Loan.
With private student loan consolidation, a private lender repays your student loans, which may include private and federal loans.
The lender issues a new loan based on your creditworthiness.
If you’re using the paper application, you’ll mail the application to the servicer of your choice. You could also choose the Income-Based Repayment Plan, the Pay As You Earn Repayment Plan or Revised Pay As You Earn Repayment Plan as long as your consolidated loan doesn’t include a parent PLUS Loan.
No private student loan refinancer is perfect for every borrower. Overview: Common Bond was started by three Wharton MBA graduates in 2011.The results in the example demonstrate why this is important.In several instances, your monthly payment could be lower (sometimes significantly lower), but you will pay thousands of dollars more in interest. You’ll need to have information about each of your loans, including the loan code, loan account number and estimated payoff amount.By contrast, federal loan consolidation won’t change how much interest accrues, and eligibility doesn’t depend on your creditworthiness. You can consolidate your federal student loans and refinance your private loans, or consolidate some of your federal loans and refinance others.Or, you may research your options and determine you shouldn’t use either.