Federal student loan consolidation basics How to consolidate federal student loans Benefits of federal consolidation Drawbacks of federal consolidation Private student loan consolidation (student loan refinancing) When you consolidate federal loans, the government pays them off and replaces them with a direct consolidation loan.You’re generally eligible once you graduate, leave school or drop below half-time enrollment.If you’re tired of making sky-high interest rate payments, student loan refinancing may be a good option for you.Refinancing saves you money by replacing your existing student loans with a new, lower-rate loan.Many of the following questions may be under consideration What is credit history and why is it important?As part of the private student loan application process, a lender will review the credit history of the student and cosigner (if applicable).
Firms that specialize in this also have many tricks in how they deal with lenders that makes them more likely to negotiate.
Only refinance your federal loans if you don’t plan to take advantage of these programs.
At a minimum, lenders want to see that you have a stable job and a steady income, that you use credit responsibly and that you’ve been in the workforce for a little while.
Your repayment term will generally start within 60 days of when your consolidation loan is first disbursed and will be based on your total federal student loan balance, among other factors; click on the link below for more details.
[Back to top] Applying for consolidation takes most borrowers less than 30 minutes, according to the Federal Student Aid website.
To qualify, you need credit in the mid-600s or higher and a steady income, or access to a co-signer.
Student loan refinancing is not the same as federal consolidation. The best refinance lender for you depends on your priorities.
To begin, lenders will require the student and cosigner, if applicable, to complete a loan application.
After the application is submitted, the lender will review a credit report for all applicants.
So, for instance: If the average comes to 6.15%, your new interest rate will be 6.25%.
Additionally, you’ll get a new loan term ranging from 10 to 30 years.