Consolidating federal student loans good idea Teen chat hampshire

You can use the following calculator to see what your interest rate would be after consolidation: Fin Aid Loan Consolidation Calculator The bottom line, though, is that student loan consolidation is NOT a route to a better interest rate.You need to refinance if that’s what you’re after, and we’ll talk more about that below.

This can be an incredibly effective way to avoid the negative consequences of default, such as your loan immediately being due in full, taxes and wages potentially be garnished, and a big hit to your credit report, among others.The catch is you can typically only use it once in your lifetime.Student loan consolidation refers specifically to the federal student loan consolidation program, a process through which you can combine one or more federal student loans into a single Direct Consolidation Loan.You cannot use this program with private student loans. Department of Education, you’re talking about refinancing, not consolidation.Federal Family Education Loans (FFEL), which were all given out prior to 2010, are only eligible for income-based repayment (IBR), which is certainly good but often not as beneficial as Pay As You Earn (PAYE) or Revised Pay As You Earn (REPAYE).

So, if you would otherwise be eligible for those better repayment plans, you can consolidate your FFEL loans and turn them into Direct Loans, thereby opening up your eligibility.And keep in mind that you can consolidate a single loan all on its own, so you don’t need multiple FFEL loans to take advantage of this.If you wouldn’t otherwise be eligible for those repayment plans, or if you already only have Direct Loans, then consolidation won’t help you here.I haven’t met a single person with student loans who doesn’t want them gone as soon as possible.It’s hard enough to start a career or raise a family, and when a large chunk of your income is going toward student loans every month, it can feel downright impossible.Refinancing, on the other hand, is done by private lenders. We’ll get into the details below, but the primary reason to consolidate your federal student loans is to qualify for beneficial income-driven repayment plans you wouldn’t otherwise be eligible for.