Can Student Debt Consolidation Help You With School Loans?
Student debt consolidation is when you refinance each of your federal school loans into a single loan that has a fixed interest rate. It is also the term used to describe refinancing a single student loan with a new interest rate.
The interest rate of the student debt consolidation loan is derived from the average rate of each of the loans combined. The interest rate you receive when you get a student debt consolidation loan should result in less money spent over the long term of repaying school loans.
What many students are unaware of, is that you will be unable to get a student debt consolidation loan to combine your federally funded student loans with your private loans. When you consolidate federally funded school loans, they can only be consolidated with a federal loan program and the federal loan programs won´t consolidate a privately funded college loan. If you do have a combination of privately funded student loans and federally funded student loans, it is definitely worth looking into student debt consolidation even though you will not be able to get one loan for all your debt.
Look for government sponsored student debt consolidation programs for each of your federal school loans. These programs are designed to help students get an affordable monthly payment, and while you can´t include private education loans, they do take your payments to the other student loans into consideration when creating your new monthly payment on your student debt consolidation loan. Many federal loans can be consolidated with interest rates of about 4%, which should save you considerable money over the long term.
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