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Your repayment term will generally start within 60 days of when your consolidation loan is first disbursed and will be based on your total federal student loan balance, among other factors.If you’re considering either federal or private student loan consolidation in order to get a drastically lower loan bill, look further into income-driven repayment instead. We’re on your side, even if it means we don’t make a cent.

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Cons of consolidating student loans asiandating ru

But unlike the federal government, they can consolidate both federal and private loans.

The goal with this process is not only to get the ease of a single payment, but to receive a lower interest rate based on your financial history.

The government offers plans that cut payments to 10% or 15% of “discretionary” income and offer forgiveness on the remaining balance after 20 or 25 years. If you have a large loan balance and a low income, income-driven repayment is probably your best option for the lowest monthly bill.

Private student loan consolidation, or refinancing, means replacing multiple student loans — private, federal or a combination of the two — with a single, new, private loan.

Here’s how: Federal loan consolidation doesn’t have a credit requirement, and it offers the benefit of a single loan bill and potentially lower payments.

But it’s only for federal loans, and it won’t cut your interest rate.And while that's a great help to many, consolidation can come with many cons to balance out these pros. The length will depend on how much you consolidate (see below).This decreases your monthly payments but likely increases how much you pay overall (as you pay significantly more in interest over the lifetime of the loan).You typically need a credit score at least in the high 600s to qualify, and rates range from around 2% to more than 9%.Consider refinancing if you have: Refinancing federal loans into a private loan means losing consumer protections specific to federal loans.Those include the option to tie payments to income and get loans forgiven if you work for the government or a nonprofit.

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