Consolidating stafford student loans

These allow you to postpone payments if you fall on hard times financially, so if you don’t have a rock-solid source of income, you may want to think twice before losing this option.When you have several individual student loans, you have the ability to pay down your highest-interest loans faster.Many borrowers are attracted to consolidating because it often translates into a lower monthly payment.However, you’ll end up paying your loans for a longer period of time, especially if you’ve already been paying on your loans for some time.

Your federal student loans have a fixed interest rate that is generally on the lower end of the spectrum, so there’s a good chance that you won’t find a better interest rate through a On the other hand, if you use a federal direct consolidation loan, a weighted average of your loans’ interest rates will be taken, and then adjusted upward by 0.125%.Most obviously, you’ll only have one monthly payment to worry about, and if you have strong credit, you might be able to find a lower interest rate when consolidating orto consolidate your loans, you’ll generally be committing to one repayment schedule for the entire term of the loan.Federal student loan borrowers can choose a standard 10-year repayment plan or an extended term, but also have the ability to take advantage of unique and potentially money-saving options such as the Pay As You Earn plan or other income-driven repayment options.For example, the Pay As You Earn plan offers forgiveness of any remaining balance after 20 years of on-time payments.So, if you’ve already made several years’ worth of payments under the plan, you’d effectively be starting the clock over.

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