Top scholarships with upcoming deadlines
The complicated world of student loans can be an intimidating system to navigate for students and recent graduates. This article will provide information about consolidating student loans - the pros, cons, and how it works.
At Bold.org we want students to feel prepared and informed about the cost of their education, and after reading this article you will be able to make an educated decision about whether or not you should consolidate your student loans.
Create a Bold.org profile and use the scholarship search feature to access hundreds of exclusive scholarships.
What is student loan consolidation?
Student loan consolidation refers to two different processes: federal and private.
Federal student loan consolidation is the process of consolidating federal student loans into a single federal student loan. This process is done through the US Department of Education. Private student loan consolidation, also known as student loan refinancing, is the process of consolidating private student loans and/or federal student loans into one private loan. This process is done through a private lender.
Federal student loans can be consolidated into one federal loan. This simplifies the work you have to do to pay back your federal loans by making it so you only have to make one monthly payment to a federal direct consolidation loan. You can also access federal loan protections, repayment plans, and forgiveness programs if you consolidate federal student loans.
Refinancing private student loans also allows for a single monthly payment. However, refinancing has different benefits than federal loan consolidation. Refinancing can lower your rates, thus saving you money in the long term.
There are pros and cons to each of these methods when it comes to consolidating student loans. Generally, the benefit of both is that lowered monthly payments make it easier for individuals to Read on for more information about both options.