Student loan consolidation

Consolidating student loans: how to refinance student loans to reduce payments and make federal college loan debt more manageable.

Loan consolidation is the process of combining multiple college student educational loans into a single, larger loan which a student pays off each month.  Students and parents who have education loans, such as Stafford loans and PLUS loans, can refinance, or consolidate multiple loans into a single loan, with a single lender, with a lower monthly payment, at a low fixed interest rate, that’s good for the life of the loan. Most federal loans can be consolidated. Students can consolidate while still in school, during the six-month grace period immediately following graduation or during the repayment period. Keep in mind, interest rates are lower when you consolidate in-school or during your grace period, but you then must begin paying the loans immediately, forfeiting your six month grace period on repaying your student loan debt. By consolidating during the grace period, you save about one-half a percentage point.  With a federal consolidation loan, your lender pays off the balances of all the loans you choose to consolidate and then issues you a new loan.  The interest rate on a consolidation loan is determined by taking the weighted average of interest rates on the federal education loans the student has and rounding up to the nearest one-eighth of a percentage point. The final rate will differ from student to student. Many people are consolidating student loans to reduce monthly university student loan payments.  A consolidation loan can lower a borrower's monthly loan payment by as much as 40 percent while stretching out the repayment period.