Consolidating unsubsidized stafford loans
Loan consolidation can be helpful for borrowers who want to combine their eligible federal student loans into a single Direct Consolidation Loan.It's important to understand and carefully consider all factors before consolidating.
The extended period makes the monthly payment amount more manageable; however, the longer your loans are in repayment, the more interest you will pay over the life of the loan.The remainder of the application involves filling in basic personal information and providing names of two references who have known you for at least three years.After you review, sign and submit your application, continue making payments on your existing federal loans until your application has been processed.If you choose an income-driven plan, you’ll be asked to provide income information on the application by granting access to your IRS tax information.You can opt out, but you’ll have to submit a copy of your most recent federal tax return directly to your loan servicer after you finish the consolidation application.So, for instance: If the average comes to 6.15%, your new interest rate will be 6.25%.
Additionally, you’ll get a new loan term ranging from 10 to 30 years.
You can choose one of four servicers for your new direct consolidation loan: Fed Loan Servicing, Great Lakes Educational Loan Services Inc., Navient and Nelnet.
If your loans are already with one of those servicers, you can stay or choose a new one.
Private consolidation is often referred to as refinancing.
These processes are often confused, but they’re very different.
Your repayment term will generally start within 60 days of when your consolidation loan is first disbursed and will be based on your total federal student loan balance, among other factors; click on the link below for more details.