Benefits of consolidating private student loans
Federal consolidation loans allow borrowers to combine several federal student loans into one loan to streamline loan repayment.The monthly payment amount may decrease because repayment can be spread over a longer time period.
Only one borrower’s loans may be included in a federal consolidation loan.
It is similar to a traditional refinance, where a new loan with a new interest rate pays off the existing loans.
Private student loan consolidation can streamline repayment by replacing multiple payments with a single monthly payment.
Previously, the interest rate would have been capped at 8.25%.
A consolidation calculator may be used to calculate the interest rate on a federal consolidation loan.
Repayment terms are typically extended (usually up to 20 years) and interest rates are often competitive.