Is consolidating your student loans a good idea
The only way to consolidate federal student loans is through the federal government, by using studentloans.gov, or by refinancing them through a private lender.
But when it comes to private loans, there are a number of different lenders out there, all offering different interest rates and terms.
NEWSLETTER: COLLEGE_PLANNERSign up for COLLEGE_PLANNER and more View Sample 1. One of the myths of consolidation is that it makes your debt less expensive by lowering your interest rate.
Historically, that may have been accurate, since consolidation was often used as a way to lock in a low interest rate on variable-rate loans, says financial aid expert Mark Kantrowitz.
Consolidating your federal loans will give you the opportunity to consolidate multiple loans into one (lower) monthly payment, and also let you choose a new repayment term and repayment plan.If you answered “yes” to all of these, you might want to look into consolidating your loans.If you’re more concerned about lowering your interest rate, private student loan consolidation, or refinancing, might be the better option for you.But that doesn’t mean consolidation is always a smart move.Here are four things to consider before you make the leap.