Refinancing your debts, and consolidating them into one low-interest loan may help make your month-to-month payments easier, and save you thousands of dollars over the lifespan of the loan.
There are two types of student loan consolidation: federal and private.
If your loans are already with one of those servicers, you can stay or choose a new one.
Consolidating your federal loans through the Department of Education is free; steer clear of companies that charge fees to consolidate them for you.
When you consolidate federal loans, your new fixed interest rate will be the weighted average of your previous rates, rounded up to the next ⅛ of 1%.
On the standard repayment plan for direct consolidation loans, you’ll make equal monthly payments for 10 to 30 years, depending on your total federal student loan balance.
Alternatively, there are six other repayment plans to choose from, including four income-driven plans.
When you’re ready, go to studentloans.gov, log in, and follow these steps to apply: You can consolidate all your federal loans or just some of them.