As the cost of higher education increases, more and more students are unable to pay for tuition expenses on their own. Student loans are one of the many types of financial assistance available for students who want to pursue a college degree even if they don’t have the money to pay for it. Loans for students are offered by both the federal government and private financial institutions. It’s important to note, however, the private and federal student loans are different. Federal loans tend to have lower interest rates and more favorable repayment terms, so apply for federal loans before you consider private alternatives.
What is it?
Student loan consolidation is a process through which students can combine their multiple student loans (should they have more than one) into a new single loan with a single interest rate and a single monthly payment. As students
are often in need of multiple loans to meet the cost of their education, they may struggle when the time to repay those loans arrives—juggling multiple payments every month can, after all, be confusing. Student loan consolidation is all about simplifying that repayment process.
Current Student Loan Consolidation Rates
How Does it Work?
Student loan consolidation works by means of variable or fixed interest rates determined by a student’s credit score and the weighted average of the rates on their current student loans. For this reason, it is important for a borrower to make sure that his or her credit score is good. It is also important for the students to make timely repayments. Consolidation also makes the loan repayment process easier. Instead of juggling multiple repayments to multiple lenders every month, you’ll only make one loan payment to a single lender.