Consolidating private loans into federal loans

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These are just a few of the issues to keep in mind when students, or former students, are contemplating consolidation.College students can take out new loans each year they’re in school, so by the time graduation comes, it’s common to have half a dozen, or more, individual loans.The easiest way to apply is online through the website using your U. Sign in at and either go to the My Account page to access the Loan Consolidation link or find the link under the Tools and Resources on the Home page.During the consolidation process, you will: You may receive mail from private loan companies offering consolidation loans.With consolidation, you now have only one bill due each month. If you have a ,000 loan with a 6% interest rate and another ,000 with 5%, and you’re planning to pay them off in 10 years. The calculation works like this: As ,000 is ⅔ of your total loan balance and ,000 is ⅓, you’d multiply each interest rate by that fraction and add the results: (⅔ * 6% ⅓ * 5% = 5.67%).Consolidating your loans may be a good option if you’re happy with your rates, you are planning to use an income-based repayment program, or refinancing is not the right fit for you at this time.

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When refinancing your student loans, you get a new loan with a private lender such as Earnest and pay off your existing loans.

Student loan consolidation is a relatively easy concept to understand: it is the process of taking multiple student loans and combining them into one. Before consolidation, a student borrower might have multiple loans to pay back and many different loan balances to track.

After consolidating his or her loans, a student borrower will have just one monthly payment and just one loan balance to maintain.

It can also be a way to get into repayment plans you otherwise wouldn’t be eligible for.

But that doesn’t mean consolidation is always a smart move.

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