Federal help consolidating student loans
Plus, refinancing is only available through private lenders, so you lose the federal benefits associated with any federal loans you refinance.The new, refinanced loan can have completely different terms, too.Use our calculator to see if refinancing can save you money. That means your interest charges could increase over time. If you’re on a tight budget and your loan payments eat up a big chunk of your salary, refinancing can help.By refinancing, you can get a new loan with a fixed interest rate and guarantee a consistent rate for the life of your loan. In addition to getting a lower rate, you can choose a new repayment term.If your goal is to save money on your student loans, refinancing may be a better option for you than consolidation.Here are some reasons you might consider refinancing instead: 1. When you refinance, lenders will offer you different loan terms.
That can help give you more breathing room in your budget.
If you want the stability of a fixed-rate loan with steady payments, consolidating can help.
Switching to a fixed-rate loan may give you a slightly higher interest rate, but it will remain the same for the duration of your loan.
Consolidation simply makes keeping track of your loans easier since you’ll have just one loan to manage and one payment to make each month. If you refinance, you can consolidate several loans into one.
However, you can refinance both federal and private loans.
While extending your payment term can make your payments more manageable, keep in mind you’ll pay more in interest over the length of the loan. You want to qualify for an income-driven repayment plan.