Thinking about consolidating your student loans?
Here are answers to common questions students have about student loan consolidation programs:
What is a consolidation loan?
Students who decide to consolidate their loans are simply combining all their loans and interest rates into one convenient loan program. Many students find that consolidating their loans will lower their monthly payments and also allow them to defer their payments for several years. In fact, some loan consolidating companies will allow students to hold off on paying back their loans for up to 3 years. The interest rate and amount consolidated depends on the lender and the index of the loan program.
What loans can be consolidated?
As you know, students can receive funding for their education from a variety of sources. Popular loan programs that can be consolidated into one loan include:
- Stafford Loans
- PLUS Loans
- Perkins Loans
- Health Professions Student Loans
- Health Education Assistance Loans (HEAL)
- Nursing Student Loans (NSLP)
- National Direct Student Loans (NDSL)
- SLS Loan (formerly ALAS Loans)
- Federal Insured Student Loan (FISL)
Why students consolidate their loans?
Some of the popular reasons why students consolidate their loans include:
- Consolidating loans means you have one fixed interest rate for the life of your loan.
- You can reduce your monthly federal loan payment by 52%
- It’s more convenient to pay the loan balance to one lender
- Consolidated loans typically take the weighted average of all your interest rates into one - up to 8.25%
- If you’re having trouble paying back your loans, you can defer payments for 3 years.
- Students are not charged any fees for consolidating their loans
Why students may not want to consolidate their loans?
- You will lose loan cancellation benefits if you include your Perkins loan
- Unpaid interest and fees will be added to your new principal balance
- Loans with a high balance will have a longer repayment period
When can students consolidate their loans?
You may consolidate your federal loans during your grace period or anytime when you’re repaying back the loan.
How are interest rates on consolidated loans calculated
Student loan consolidation interest rates are typically the weighted average of all your interest rates on the loans you want to consolidate. The interest rate may not exceed 8.25%.
Who qualifies for a student loan consolidation?
If you’re wondering if you’ll qualify for a consolidated loan program, simply apply for a Student Loan Consolidation with Student Loan Solutions.