Consolidating college student loans
Consolidating college student loans - www kvarthaonline info
It’s important to remember that these numbers are averages — some students manage to earn their degrees with far less debt. But wherever you are on the spectrum, being an informed borrower can help you stay organized, figure out the best way to pay back your debt, and maintain a reasonable lifestyle while you’re doing it.
When lenders claim they can save you money with student loan consolidation, they often mean they can lower your monthly payments by stretching out your term — say, from 10 years to 20 years.In my situation, this made consolidation a no-brainer.I was able to consolidate all of my federal student loans during my grace period at a 2.875% interest rate, which was then locked in for the life of my loan and remains the interest rate I pay today.It’s no wonder then that student loan debt is on the rise, too.In 2013, 59% of graduates from four-year public colleges had borrowed money to help get them through school, up from 52% in 2001.(I’ll explain this in more detail later on in this article.) Various private lenders also offer consolidation loans.
Some even allow you to include federal student loans in a private consolidation loan.That’s because it’s based on the interest rates of the loans you’ll be consolidating.You’ll pay the weighted average of those rates rounded up to the nearest 1/8th of a percentage point.(For a rundown of the different types of federal loans, see our resource on the best student loans.) You can consolidate your federal loans any time after you graduate, leave school, or drop below half-time enrollment, and you probably won’t have to undergo a credit check to do it.The interest rate on a federal student consolidation loan is fixed for the life of your loan, but varies from person to person.If you don’t have a long or strong credit history, as is the case with many students and recent graduates, you may not qualify, or you might be required to get a cosigner with better credit to secure a better interest rate.