What are the advantages to consolidation loans?
Students consolidate their loans to reduce their monthly payment by paying over a longer period of time, to have one payment instead of several for students with more than one lender, and/or to lock in a lower, fixed interest rate. You will have the option of keeping a 10 year repayment plan or selecting a longer repayment plan depending on the amount of your loan. Selecting a longer repayment plan decreases your monthly payment, but will significantly increase the amount of interest you pay and the overall cost of your loan. • What are the drawbacks to consolidation? Once you consolidate your variable interest rate Stafford loans into a consolidation loan, you have fixed the interest rate and cannot benefit from further interest reductions. For some of the loans, you may lose your grace period and some deferment and cancellation provisions when you consolidate. For example if you have a Perkins Loan, part of your loan can be canceled if you teach in a designated economic hardship area
Students consolidate their loans to reduce their monthly payment by paying over a longer period of time, to have one payment instead of several for students with more than one lender, and/or to lock in a lower, fixed interest rate. You will have the option of keeping a 10 year repayment plan or selecting a longer repayment plan depending on the amount of your loan. Selecting a longer repayment plan decreases your monthly payment, but will significantly increase the amount of interest you pay and the overall cost of your loan. • What are the drawbacks to consolidation? Once you consolidate your variable interest rate Stafford loans into a consolidation loan, you have fixed the interest rate and cannot benefit from further interest reductions. For some of the loans, you may lose your grace period and some deferment and cancellation provisions when you consolidate. For example if you have a Perkins Loan, part of your loan can be canceled if you teach in a designated economic hardship area
