Consolidating and refinancing federal student loans

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If you're a parent, and you borrow with a PLUS loan to pay for your children's college, you should never consolidate these loans. This is typically a bad idea because PLUS loans don't qualify for income-based repayment programs like IBR, PAYE, or Re PAYE.As such, if you consolidate, you're at a loss of these programs.For example, if you were saving 0.25% for using Direct Debit, you would need to re-setup that plan to save again.These small factors are what people forget when consolidating their student loans, and it could end up costing them more.Here’s an example: If your payments currently come to a total of 0 across multiple accounts and you apply for a debt consolidation loan, that payment could come down to say 0.

Because remember, student loan consolidation is about convenience in paying multiple loans – nothing else.

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Student loan consolidation makes this easier on you by making those 3 different loans into a single loan to make payments on. Although, a debt consolidation loan helps to simplify and streamline your payments, a downside to getting it is that your new lower monthly payments could also lengthen the amount of time you will have to pay off your loans by.

Tip: You could easily offset this by paying a little more each month.

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