Benefits of consolidating federal student loans
Paying off your loans earlier in addition to getting a lower interest rate will save you quite a bit of money.
There are two ways to consolidate your federal student loans.
Consolidating your federal student loans with a private lender could save thousands.
Federal student loans offer many more protections to the borrower than private student loans.
On the plus side, you can simplify your life by consolidating all your federal student loans into one payment.
A Direct Consolidation Loan enables you to consolidate multiple federal student loans so you have only one monthly payment.
Your federal student loans are paid off and only the Direct Consolidation Loan remains. These are good reasons to get a Federal Direction Consolidation Loan: Generally, it’s wise to consider consolidating your federal student loans with a private lender if you have a stable job, with a stable income, and you do not believe you can benefit from any of the student loan forgiveness programs.
For borrowers with financial stability as well as a good credit score, often the borrower will save many thousands of dollars by reducing their interest rate with a private student loan lender.
Say, for example, you currently have a balance of ,000 at an average of 7% over 10 years.
If you refinance and consolidate at 3% for the same term, you will save ,864.32 and your monthly payment will be .87.There is no credit requirement for federal student loan consolidation.