Paying off student loan debt can be a confusing experience, given that most students take on more than one student loan to pay for college. It’s difficult to keep track of different due dates and payment obligations each month.
In order to simplify things, a person can opt for student loan consolidation.
What is Student Loan Consolidation?
Student loan consolidation is a repayment tool that combines different student loans into one new loan. The new interest rates will be based on the average rate of your current loans. Typically, the repayment period of the new loan is ten years.
The easiest loans to consolidate are federal student loans, since their interest rates are not based on a person’s credit, unlike private student loans.
Most lenders require a minimum fee before consolidating your loans. The minimum fee varies from company to company, but many lenders usually don’t consolidate student loans totaling less than $10,000.
Keep in mind that you will not be able to consolidate student loans that are in default. So if you defaulted on some loans, you must make it a priority to contact your lenders and get back on a payment plan before you try to consolidate those loans.
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