Pros and cons of consolidating school loans

Refinancing your federal and/or private student loans can be a great way to consolidate payments, and potentially save money on interest over time.However, refinancing may not be the best option for everyone.CONSOLIDATING STUDENT LOANS If you have multiple student loans, STUDENT LOAN consolidation can offer some simplicity to your repayment.

A Direct Consolidation Loan from the federal government allows you to consolidate (combine) multiple federal education loans into one loan.STUDENT LOAN And you can often get a lower monthly payment 0, 10 YEARS, PRINCIPAL, INTEREST because you will have a longer repayment period— 0, 25 YEARS so there are some trade-offs to keep in mind.Let’s look at an example of getting a federal consolidation loan— FEDERAL CONSOLIDATION LOAN GOV you can also get a private consolidation loan PRIVATE CONSOLIDATION LOAN BANK if you have private loans, but we’ll get to that in a minute.There are two types of student loan refinancing: federal and private.A Direct Consolidation Loan can refinance federal student loans and parent loans.

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The result is a single monthly payment for your federal student loans at one interest rate instead of multiple payments.

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