What is student loan consolidation?
Student loan consolidation allows you to combine one or more existing student loans into a single new loan. • It is a convenient, affordable way to repay your federal education loans. • Based on the total educational loan indebtedness, extended repayment term allows for a lower monthly payment. • Allows you to obtain a fixed interest rate. • Makes managing your debt easier with just one payment to just one lender.
Federal loan consolidation is an option for students to combine all of their previous loans into one new consolidation loan. The consolidation loan is designed to extend the loan repayment period and reduce the amount of individual payments. This also means that the total cost of the loan will increase since you will be paying more interest in total.
Loan consolidation allows students to combine all of their existing federal student loans into one. There are several advantages of loan consolidation. It simplifies repayment by having multiple loans under a single loan holder, reduces the required minimum monthly payments by extending the repayment period from the standard 10 years to a maximum of 30 years and uses a graduated repayment schedule. The disadvantages to loan consolidation are that students end up paying more interest and they are no longer eligible for many types of deferments.
