Consolidating private federal student loans together

These, in turn, can yield more possibilities as far as reducing your monthly payments and total amount of student debt.

A good credit history is also ideal if you are planning to refinance.

You may also have access to a new repayment schedule (like an income-contingent plan) that’s a little easier on your wallet.

If you don’t care about the extra cash and just want a consolidation for the simplicity of a single monthly payment, you can use any money you save to pay down the principal.

When you opt for student loan consolidation, you’re working with a lender who will pay off your existing balances.

They will, then, replace those loans with a new, consolidated loan and a new monthly payment.

Consolidation loans like the Stafford Loans, for example, can help make this possible with Direct and Federal Family Education Loan (FFEL) consolidation programs.

The key terms for federal consolidation loans do not vary by lender: no application or origination fees are allowed and there are no prepayment penalties.

Federal law sets the period of time for paying back the loans and sets a ceiling on the interest rate.

Timing is everything: You’ll need to complete all the paperwork and have it processed and approved before repayment begins.

The downside is that your grace period will end once your consolidation loan goes through.

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Private consolidation lenders, on the other hand, are not subject to those terms and may include variable rates and any number of fees.

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