Certain loan types that aren’t otherwise eligible for loan forgiveness and income-driven repayment become eligible as a result of consolidation.
Access to income-driven repayment plans: If you’re having trouble affording your student loan bill, consider repaying your loans on an income-driven plan.
That means your payments will be tied to your earnings and your loan balance will be forgiven after 20 or 25 years.
A consolidation loan simplifies and streamlines your finances by replacing multiple loan payments with a single loan payment.
There are two types of student loan refinancing: federal and private.
A Direct Consolidation Loan can refinance federal student loans and parent loans.
Here’s a quick breakdown: Learn more about the two types of student loan consolidation to see whether one is right for you.
[Skip to refinancing] This option is available only for federal student loans.
The government combines your separate loans into a direct consolidation loan, and it assigns you a 10- to 30-year repayment term based on your total balance.Your interest rate is a weighted average of your previous rates, so it’s not determined by your financial history.A private refinance loan can refinance both federal student loans (including Parent PLUS Loans) and non-federal student loans from private financial institutions, such as banks and credit unions, as well as non-federal student loans financed by states or colleges/universities.There are so many choices to make when you take out student loans: big loan or small loan, federal or private, co-signer or no co-signer.You’ve got just as many choices when it’s time to repay your loans.If you’re deciding between federal student loan consolidation and refinancing, it’s important to understand the differences before choosing which makes the most sense for you.