Along with gaining a new degree, many graduates will also leave campus with new student loan payments they'll have to fit into their post-graduate budgets.
Here's what you need to know before deciding to consolidate student loans.
When it comes to consolidation, the types of loans you have matters, but most federal loans, including Stafford, Perkins, Direct Plus and Supplemental loans, can be consolidated with other federal student loans."The interest rate on (federal) consolidation loans is an average of the interest rates on the (federal) loans you're consolidating," says Ken O'Connor, director of student advocacy for Fynanz, a New York City firm providing technology for the private student loan market.
Even if your rates seem high, t he Department of Education puts a cap on consolidation loan rates at 8.25 percent.
Fortunately, we’ve highlighted the six best banks and lenders to help you refinance and consolidate both private and federal student loans, based on your financial situation.
With student loan consolidation, you may be able to refinance at a lower interest rate, decrease your monthly payment, or both!
Disclosure: Student Loan Hero is a free website to help student loan borrowers.
You may pay more in the long run, but for now, you’ll be able to make just one monthly payment – and it may be considerably lower than your current loan payments.
Consolidation provides grads with the ability to combine their student loans into one megaloan, but it comes with drawbacks.
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