Cost of consolidating student loans

Posted by / 20-Oct-2019 06:51

If you're eligible for a lower rate than you currently pay, you could save a significant amount on interest, making it an especially appealing option for borrowers with high interest private loans.Before taking the plunge to consolidate and refinance student loans with a private lender, consider the following: Your credit score matters: Those with high credit scores will get the lowest interest rates on a refinance loan.But the longer you take to pay off a loan, the more interest you'll pay over time.

Whether to go for one of these options, though, depends on the type of loans you have and how much you stand to save.Choosing one could make your payments much more affordable.Any remaining debt after 20 or 25 years of on-time payments toward an income-driven plan will be forgiven, though you'll pay tax on that amount.But variable rates are just that: variable, which means they can go up or down depending on economic conditions.It's hard to predict when the Federal Reserve will raise interest rates,so opting for a variable rate likely isn't wise unless you plan to pay off your loan quickly.

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Unlike federal student loan consolidation, refinancing is available for both federal and private student loans.