Consolidating stafford student loans
These processes are often confused, but they’re very different.
Here’s how: Federal loan consolidation doesn’t have a credit requirement, and it offers the benefit of a single loan bill and potentially lower payments.
After 180 days, you will need to apply for a new Direct Consolidation Loan.
Consolidation is a great option to make your payments more manageable and maybe even save some money. Using student loans to pay for could cost you a whole lot more.The average college graduate in 2016, who took out student loans, owes ,172, a 6% increase from 2015.When you consolidate federal loans, your new fixed interest rate will be the weighted average of your previous rates, rounded up to the next ⅛ of 1%.So, for instance: If the average comes to 6.15%, your new interest rate will be 6.25%. We believe everyone should be able to make financial decisions with confidence. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. " There are two types of student loan consolidation: federal and private. We’re on your side, even if it means we don’t make a cent.You’re generally eligible once you graduate, leave school or drop below half-time enrollment.Consolidating your federal loans through the Department of Education is free; steer clear of companies that charge fees to consolidate them for you.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.