Consolidating student loans information

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So, the interest rate on a consolidation loan may be higher than the underlying loans.However, the interest rate is fixed for the life of the loan.This is often the reason that people cite when they say you shouldn’t combine federal and private loans.But before you dismiss the idea of refinancing, you should first take a look to see if any of these benefits apply to you.One way to resolve a defaulted loan is to combine your existing federal student loans into a new Direct Consolidation Loan from the US Department of Education (ED).

Even if you have only one defaulted student loan, you may obtain a Direct Consolidation Loan to resolve the default.Depending upon the total balance you are consolidating, you may extend the repayment period for up to 30 years with consolidation.The extended period makes the monthly payment amount more manageable; however, the longer your loans are in repayment, the more interest you will pay over the life of the loan.Loan consolidation can be helpful for borrowers who want to combine their eligible federal student loans into a single Direct Consolidation Loan.It's important to understand and carefully consider all factors before consolidating.In the process of consolidation, each original loan is paid in full and a new Direct Consolidation Loan is originated for the combined balance of the consolidated loans.