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Pros cons consolidating federal loans Hot cams sex online free

While all of the above are good reasons to consider consolidating your federal student loans, here are four things to watch out for.

Consolidating your federal student loans won’t improve your interest rate.

Refinancing, on the other hand, is done by private lenders. We’ll get into the details below, but the primary reason to consolidate your federal student loans is to qualify for beneficial income-driven repayment plans you wouldn’t otherwise be eligible for.

And the major downside is simply that consolidating won’t get you a lower interest rate, which is often a big point of confusion.

This can be an incredibly effective way to avoid the negative consequences of default, such as your loan immediately being due in full, taxes and wages potentially be garnished, and a big hit to your credit report, among others.

The catch is you can typically only use it once in your lifetime.

In fact, it’s likely that your interest rate will increase by just a tiny bit.

If your federal student loans are in default, which typically means that you have missed payments for 270 days, you can consolidate your loans to get out.

So you should be confident that you won’t default again in the near future before proceeding.

Otherwise, you may want to consider alternative ways to get out of default, such as rehabilitation.

You can use the following calculator to see what your interest rate would be after consolidation: Fin Aid Loan Consolidation Calculator The bottom line, though, is that student loan consolidation is NOT a route to a better interest rate.

You need to refinance if that’s what you’re after, and we’ll talk more about that below.

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