Consolidating key alternative loans

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Consolidation also restarts the clock on deferments and forbearances, giving you extra time for each.

If your monthly payments are manageable, it may be tempting to consolidate out of convenience. Once you near the end of your repayment – once you have a few thousand dollars or a couple more years to go – it’s usually not worth it to consolidate.

For instance, if you’re on a ten-year repayment plan with your original loans, consolidation could get you an extension or offer the income-contingent payback plan.Under this act, new federal loans have fixed interest rates determined each spring for the upcoming year.If you took out loans after the act was passed, you’ll have a fixed rate, not a variable one.Many students and graduates take out multiple loans. If you’re in this category, you’ve probably considered combining all those loans into one—a common process known as either student loan consolidation or student loan refinancing.Consolidation is the process of combining several student loans into one consolidation loan that retains all the benefits of federal loans: flexible repayment options if you lose your job or go back to school and forgiveness programs after years of service in certain qualifying fields.

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