Consolidate Your Loans
If you have several federal education loans, you may want to consider combining them into one new loan with one monthly payment. This is called loan consolidation and can help keep you organized and on track with repayment.
Like many federal loan borrowers, you may have both FFEL and Direct Loans. The U.S. Department of Education (ED) encourages borrowers with both types of loans to consolidate them into the Direct Loan program. Once these loans are consolidated, you will have repayment options, some which lower your monthly payments, from which to choose.
Is consolidating your loans right for you? Consider the advantages and disadvantages carefully before you act. Once you consolidate, you are locked into a loan with a fixed interest rate. If you just want to reduce your monthly payment, discuss the federal loan repayment options available with your lender.
Federal Loan Consolidation
If consolidating variable interest rate loans, you save money if you consolidate while variable interest rates are low.
Variable interest rates change annually. Therefore, if you consolidate your variable interest rate loans and the interest rates drop the following year, you have "locked" into the higher interest rate for the life of the loan.
Lower Monthly Payment
Loss of Deferment and Forgiveness Benefits
More Interest Paid
Manage Monthly Budget
Remove Loans From Default Status
No Extra Costs
Loss of Payment Incentives
Visit the Federal Student Loan Consolidation Webpage for more information.
There are few private loan consolidation options. You should know the interest rate, fees and terms before you sign any agreement. In general, you cannot consolidate private loans into federal loans, but avoid the temptation to consolidate federal loans into private; you may lose some valuable benefits available to federal loan holders. Review information about private student loans.