Student Loan Consolidation
Student loan consolidation is a way to take all of your student loans from college and combined them into one easy to manage loan. Consolidating your college loans typically lowers your monthly payments as it extends your loan terms. But remember, there is usually no prepayment penalties so you can always pay more than your minimum due to pay off your student loans more quickly thus, saving yourself money in the long run.
Now, one thing to keep in mind is that you cannot combine federal student loans, such as Stafford loans, PLUS loans and Perkins loans into one loan with private student loans. Federal and private student loans must be consolidated separately.
The two types of student loan consolidation programs are:
Federal student loan consolidation allows you to combined Stafford Loans, Perkins loans and Grad PLUS and Stafford loans into one loan with a new fixed interest rate. Sorry, you cannot consolidate your parents PLUS loans into your own federal student loan consolidation, as it is their loan now even though they took it out for you. Your parents however, may be able to consolidate their own PLUS loan with any other PLUS loans they have or any federal student loans they may have taken out in the past.
Private student loan consolidation allows you to combined any private student loans you may have taken out in college into one easy to manage loan with a new interest rate. Most of the time however, the interest rate is not fixed on a private student loan consolidation like a federal loan consolidation. But that doesn’t mean a program isn’t available to you. Remember, a private loan consolidation will typically require another credit check in order to combined private loans.