Lenders consolidating federal student loans
If you’re asking, “should I consolidate my student loans? This is especially true if you’re not having trouble making your payments and you can target your repayment efforts to specific loans.Sophia Bera, a financial planner and founder of Gen Y Planning, agreed that it doesn’t usually make sense for borrowers who just graduated to consolidate their loans.We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions.The rates and terms listed on our website are estimates and are subject to change at any time.Refinancing student loans with a private lender is generally done in order to consolidate loans into one with an overall lower interest rate.Direct Consolidation, on the other hand, does not help save money on interest because it takes a weighted average of your previous loans and tacks on a small percentage on top.Here’s how to determine whether consolidation will actually help you after graduation.
If your monthly payments are unmanageable and you’d benefit from having them capped at a percentage of your income, or have already defaulted and are now rehabilitating your loans, consolidation is the way to go.
Or you might choose to pay off any private loans first since they tend to have less flexible repayment options. The pros and cons of student loan consolidation are closely interrelated.