Us government consolidating student loans
Consolidating federal student loans may be a good strategy to lower monthly payments or to get out of default, but it is not always a good idea.As you weigh the pros and cons, keep in mind that timing is critical.As you can see from this example, the borrower had not one but two interest rates which have now been combined into one interest rate that takes the balance(s) of the loan into consideration when calculating the new and fair weighted average interest rate.The length of time required to complete the consolidation depends largely on the borrower and the federal servicer.
Your student loans would need to show that they are not in “FULL TIME” status, and must be in repayment.
Next, the remaining k balance makes up 75% of the borrowers total balance, so they would multiple 75% x 3.5% = 2.625%.
The Department of Education would then combined those two numbers to come up with the weighted average interest rate of 1.625% 2.625% = 4.25%.
What is the most important is to become educated about your loans, what programs exist to help you, and then to take action on what you determine to be the best for your particular situation?
There are several repayment plans the borrower can choose to take advantage of in the new consolidated loan.