Even if your rates seem high, t he Department of Education puts a cap on consolidation loan rates at 8.25 percent.
One major advantage of federal consolidation loans is that borrowers don't need a stellar credit score to qualify, they can apply any time (even if their loan is in default) at Loan gov, and they'll always get a fixed interest rate.
This can be attractive to borrowers because the consolidation frequently results in longer repayment periods and lower monthly payments.
When it comes to consolidation, the types of loans you have matters, but most federal loans, including Stafford, Perkins, Direct Plus and Supplemental loans, can be consolidated with other federal student loans."The interest rate on (federal) consolidation loans is an average of the interest rates on the (federal) loans you're consolidating," says Ken O'Connor, director of student advocacy for Fynanz, a New York City firm providing technology for the private student loan market.
Up to 60 percent of the cost of your education may have come from federal student loans administered by the Canada Student Loan Program.
These include: In all remaining provinces, you could apply for both federal and provincial loans with one application, but these student loans will not be consolidated upon graduation.
That means you'll have to be sure to repay each loan separately.
In loan consolidation, your lender essentially buys all of your loans from the original lenders and reissues you with a new loan for the combined total.
This process resets the terms of your loan (the length you have to pay it back, the interest rate, etc.).
Here's what you need to know before deciding to consolidate student loans.