Consolidating student loans in 2016
If you continue borrowing for graduate school, add another 4-6 lenders to the mix.Each of these student loans has its own due date, interest rate and payment amount.You may be contacted by private companies that offer to help you apply for a Direct Consolidation Loan, for a fee. There’s no need to pay anyone for assistance in getting a Direct Consolidation Loan. The loans that were consolidated are paid off and no longer exist. For example, if you have both Direct Loans and other types of federal student loans, and you have been making payments toward PSLF on your Direct Loans, you should not consolidate your Direct Loans along with your other loans.Repayment of a Direct Consolidation Loan will begin within 60 days after the loan is disbursed (paid out).
A Direct Consolidation Loan has a fixed interest rate for the life of the loan.
If some or all of your student loans were from private lenders, you will have to use a refinancing program to achieve similar results.
Consolidation is a way to make repaying student loans more manageable, and possibly less expensive.
The typical student borrower receives money from federal loan programs every semester in school.
It often comes from different lenders, so it is not unusual to owe money to 8-10 separate lenders by the time you graduate.Loan consolidation can also give you access to additional loan repayment plans and forgiveness programs. If you want to lower your monthly payment amount but are concerned about the impact of loan consolidation, you might want to consider deferment or forbearance as options for short-term payment relief, or consider switching to an income-driven repayment plan for longer-term payment relief.