Online College Loans Consolidation Information Guide
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Student Loans: How to refinance student loans to lower monthly
loan payments and reduce college debt.
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.