How Do I Consolidate My Student Loans?

How do I consolidate my student loans?” is something many people wonder today after paying on several loans for years and feeling as if the debts are too much. Fortunately, loan consolidation is common and can help ease the burden of paying for an education. Any federal education loan like a Stafford or PLUS loan is eligible for consolidation, and though it’s less financially helpful at times private education loans can be consolidated as well.

How Do I Consolidate My Student Loans?

However, if you have both private and federal student loans you can’t combine them into one consolidation. Federal loans qualify you for special low interest rates when you consolidate, and private loans don’t get that benefit and are instead based on your credit score like any other loan or consolidation.

When you wonder, “How do I consolidate my student loans?” you might think you need to contact some agency you see online or on television for help in doing so. But you don’t need to pay any company a fee for help consolidating your loans. Any lender can handle this for you so you should contact a lender directly.

Unless you specify a certain time period when do ask your lender, “How do I consolidate my student loans?” they’ll give you the standard 10-year repayment plan. But you can have the loan repayment schedule extended up to 30 years if you want. This will of course cost you a great deal more in interest over that time period, but will lower your monthly payment. If it’s necessary to get the lowest payment possible, you may wish for this type of extension. Then if you can you can pay extra to help save money on interest.

When you pay extra on this type of loan you should let your lender know that you’re paying the extra toward principle, so that it can help you pay off the loan faster and save interest. For those who simply want to lock in a lower rate and save money on interest without extending it beyond 10 years, then the same guidelines applies when making extra payments.

The benefit of getting a lower, locked-in interest rate is the reason most people ask, “How do I consolidate my student loans;” if the interest rate rises while you’re in repayment, you still get the lower rate you agreed upon during consolidation, which can save you thousands of dollars over time.