How To Consolidate Student Loans

Understanding how to consolidate student loans can be a huge step towards financial freedom. Consolidation allows you to combine several loans in to one payment, and can cut your overall interest. The result is lower monthly bills and greater financial freedom. Even if you are in a good position financially, it’s not a bad idea to look in to consolidation. Here’s what you should know.

Consolidate Student Loans to Save Money

Federal Consolidation Programs

If you have multiple loans that were granted through the government, you may be interested in knowing how to consolidate student loans through additional government programs. To be eligible you need to have loans issued through the federal government. You will have to fill out paperwork and the process can be lengthy, but the advantages of not having to pay consolidation fees or prepayment penalties are worth the additional time. These programs work in a similar fashion to other consolidation programs. You will lump all of your eligible loans in to a single loan with new terms. The new loan is paid back in a single payment, and typically with lower interest rates. Federal consolidation can also be done with a single loan, unlike private loan programs. Since the government is only concerned with being repaid and not necessarily making a profit, making, the programs easy to qualify for. As long as you are in good standing with your current loans you should qualify.

Private Loan Consolidation

Understanding how to consolidate student loans with private programs will be necessary if you have loans from private institutions. Private consolidations are essentially new loans. The new loan will be enough to cover the existing loans. The existing loans are paid back with the new loan, and you now make payments on only one loan. The interest rates can vary on private consolidations, but with decent credit you can find good fixed rates. To qualify for these you will need to check with the lender to find their specific requirements. In most cases as long as the loans have not been default you will qualify. You simply need to provide the loan information for your current loans and fill out basic paperwork to get the process started. Consolidate student loans and start saving today.