Refinancing and consolidating debt

17-Nov-2015 19:33 by 3 Comments

Refinancing and consolidating debt - Free webcam online no credit card

(For a rundown of the different types of federal loans, see our resource on the best student loans.) You can consolidate your federal loans any time after you graduate, leave school, or drop below half-time enrollment, and you probably won’t have to undergo a credit check to do it.

Back then, federal student loan rates were still variable, and in 2005, interest rates were at historic lows.In truth, this oft-touted benefit of student loan consolidation really depends on your new interest rate and any fees the lender charges.When lenders claim they can save you money with student loan consolidation, they often mean they can lower your monthly payments by stretching out your term — say, from 10 years to 20 years.Student loan consolidation may not be the silver-bullet solution that it used to be, but it can still offer some benefits depending on your situation.First and foremost, if you’re juggling multiple student loan payments, student loan consolidation can simplify your finances.Had I not consolidated, I could have been paying 7.14% starting in 2006 and 7.22% in 2007 before rates dipped back down to 4.21% in 2008.

Since 2006, however, all federal student loans have been issued with fixed interest rates for the life of the loan.

That’s because it’s based on the interest rates of the loans you’ll be consolidating.

You’ll pay the weighted average of those rates rounded up to the nearest 1/8th of a percentage point.

It’s important to remember that these numbers are averages — some students manage to earn their degrees with far less debt. But wherever you are on the spectrum, being an informed borrower can help you stay organized, figure out the best way to pay back your debt, and maintain a reasonable lifestyle while you’re doing it.

Student loan consolidation is one possible way to help you do that — but only if you’re realistic about its benefits and limitations.

In my situation, this made consolidation a no-brainer.