Consolidating your student loans

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With student loan consolidation you roll your multiple loans into one larger loan.No longer having to juggle multiple payments is a valuable time saver and stress reducer.A layoff, a serious illness or maybe you decide to go back to school and your reduced income makes it hard to keep paying back your existing loans.A federal consolidated loan is eligible for the government’s forbearance and deferment programs that can help you navigate around any speed bumps that may arise.Staying on top of all that is no small or easy task.

Your credit scores are not used to determine your eligibility. Federal student loan borrowers can choose among different repayment programs.A co-signer is legally responsible for making loan payments if you fall behind. Many private student consolidation loans charge a variable interest rate.If you have strong credit scores, you may qualify for an initial variable rate that is less than the permanent fixed rate you would pay on a Federal loan consolidation (if you have federal loans). But be mindful that a variable rate may ratchet higher based on changing economic conditions, or if you fall behind on your payments.But keep in mind that the longer you take to pay off a loan, the more interest you will pay over the life of the loan.And the sooner you get your student loans paid off, the sooner you can divert more of your savings to other key financial goals, such as retirement, a home down payment, or perhaps a 529 College Savings fund for your children. Sometimes life gets in the way of staying on pace with monthly loan payments.

The fixed rate is based on the interest rates on the loans you are combining.

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