Consolidating your student loans
That said, care is needed in considering this move.You are asking someone-Mom, Dad, your favorite aunt or uncle- to put their money on the line.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.
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.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.The fixed rate is based on the interest rates on the loans you are combining.The bigger the balance for a given loan, the more impact its interest rate will play in determining your consolidated loan rate. Anyone with one or more federal student loans is eligible for the Federal Direct Consolidation Loan Program.
As long as you are up to date on your payments, you will be able to consolidate.