Student Loan Consolidation FAQ
Am I Eligible to Consolidate My Student Loan?
You must have more than $7,500 in federal student loan debt, private student loans usually use the $7,500 cut off as well. You are going to need to be a US citizen as well as currently in the process of repaying your student loans. For private student loans your credit score is going to depend on what type of consolidation loan you can get.
How Does Student Loan Consolidation Lower My Monthly Payment?
By increasing the length of your debt repayment, loan consolidation allows you to greatly reduce your monthly payment. A very basic example: Let's say you are paying $400 a month for the next 10 years, if you increase your loan to 20 years then you can pay $250 a month instead.
How Soon Can I Consolidate My Student Loans?
You must be in the repayment process, whether you graduated or fell bellow half time status. You can consolidate your debt during your grace period and receive a lower interest rate, but you will waive the rest of the grace period and start paying your loan instantly.
Can I Change My Mind Once I Have Consolidated My Loan?
No, you can not. Once you consolidate your loan you are locked into that repayment plan until the term is up.
What Is the Interest Rate?
When you consolidate a federal student loan you are given fixed interest rate raging from 5%-8% based on the loan. Private student loan consolidation will give a variable loan based on what the current market is like.
How Does My Credit Rating Affect Consolidation?
If you have a federal student loan your credit check will not affect your consolidation process. With a private student loan you could have to pay a higher interest rate. In both federal and private student loans, consolidation could help to improve your credit score.
When Should I Consolidate?
You should consolidate your student loans whenever your monthly payments become to much to bare. However, if you get a head start and consolidate during your grace period you could save even more money down the road.
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