Will consolidating student loans
If you have multiple federal student loans and want to simplify your payments, consolidating can be a smart strategy.One way to consolidate your debt is to apply for a federal Direct Consolidation Loan.That can help give you more breathing room in your budget.You’ll pay more in interest over the length of your new repayment term, but an income-driven repayment plan can make keeping up with your payments possible on a small salary. If you have older federal loans, you may have some with variable interest rates.Often, Direct Consolidation is required in order to enroll in federal programs such as income-based repayment.
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If you consolidate loans other than Direct Loans, you can become eligible for income-driven repayment plans.
Under these plans, the government extends your repayment term and caps your payments at a percentage of your income.
Sometimes it might even cause you to miss payments.
In cases like this, consolidating your student loans could help you manage your loans more efficiently. Here’s what to keep in mind before you dive into student loan consolidation.