Consolidating Your Student Loans

Consolidating student loans means that you are combining multiple loans into one loan. This will help you decrease the number of payments you make every month so that you will only have one payment to make. Depending on the amount of your loans your repayment period may be extended from 10 years to 30 years. The interest rate for the duration of your loan will remain the same as it is a fixed rate. Normally, student loans are based on the treasury bill and would change every July 1st, with a consolidated loan your rate is locked in for the life of the loan so you would not need to worry about the interest rate changing. It is important to remember that there are two different consolidation loans available, federal loans and private loans. These two may be combined into one, however; it is not recommended due to the fact that federal loans receive a significantly lower interest rate.

There are many reasons why you should consolidate your student loans.

• Consolidating student loans will help you manage your monthly finances by eliminating multiple payments and combining them into one monthly payment.
• It is also possible that by consolidating you loans you will receive a lower interest rate which will help reduce your monthly payment.
• Depending on the amount of your loan you may be able to extend the repayment period up to 30 years.
• It is also possible to earn an even lower interest rate by consecutively making payments on time and by using an auto-debit payment method.
• Improve your credit rating by having a better income to loan ratio with lower monthly payments.

In order to be eligible to consolidate your student loans you must be:

• a college graduate, left school before completion, or currently attending school full-time or part-time.
• you currently have loans that are being repaid, in deferment, forbearance or in grace.
• Your student loans must not be consolidated with another lender.
• The minimum balance of your student loans is at least $10,000.

It is not possible to consolidate your student loans if you have previously consolidated your loans. The Department of Education has said however that you may reconsolidate if you have new loans or loans that were not included in the original consolidation.