Advice on consolidating student loans
LOAN CANCELLATION DEFERMENT, PRINCIPAL But if you do decide to consolidate your loans, CONSOLIDATED LOAN PAYMENT it's good to keep in mind that you always have the option ADDITIONAL PAYMENTS of paying more than your monthly payment which can save you money over time, while still having the flexibility of not THE FULL AMOUNT ON STANDARD 10-YEAR PAYMENTS having to make the higher monthly payments that you would have on a standard ten-year plan. BILL, PAST DUE, TOTAL AMOUNT DUE If you're struggling to make payments on your original loans, you might consider repayment options PAYCHECK other than loan consolidation, like an income-based repayment plan.
INCOME-BASED REPAYMENT Or if you run into a financial hardship and need short-term relief, you might consider deferment or forbearance.
300, 850, BAD, FAIR, EXCELLENT ,000 PRIVATE LOANS @5.4% INTEREST So if you have a lower credit score, you might be looking at a higher interest rate.
@6.5% INTEREST RATE If you’ve just left school, CREDIT SCORE 550 you probably haven’t had the chance to build up a good credit history yet, so with private consolidation PRIVATE LOAN CONSOLIDATION LOWER MONTHLY PAYMENT you might get a simpler, lower monthly payment, but you could end up paying more in combined interest.
,000, ORIGINAL PRINCIPAL Now let’s say you want to consolidate these loans.
Under your new loan terms, your loans will be consolidated into one fifty thousand dollar loan— ,000 FEDERAL LOANS and you’ll have one new fixed interest rate, 15000 X 3.5, 20000 X 4.0, 15000 X 5.0 which is determined by taking the weighted average of the interest rates on your previous loans, and rounding up to the nearest 207500 ÷ 50000 one eighth of one percent.
It can vary from ten to thirty years, but in this case it’s going to be twenty five years.
And your new monthly payment will be about two hundred seventy dollars.
= ,000 TOTAL INTEREST So while simpler and lower monthly payments might give you some relief in the present, the trade-off is that it can cost you a lot more over time.BANK Entering these numbers into the loan calculator LOAN CALCULATOR, YOUR LOANS SUBSIDIZED LOAN, UNSUBSIDIZED LOANS at gov— CALCULATE, 0/MO on a standard ten-year repayment plan, you’re going to be paying a little over five hundred dollars a month.