Loan cannot be consolidated if they are still in-school status. The biggest attraction to consolidating student loans is the reduced monthly payment via the income based repayment plans.
One thing that’s important to keep in mind is that your repayment term may be extended if you have already been paying on your loans for a long time.
But consolidation takes all of that diverse debt and puts in into one basket, namely a single loan with just one payment to worry about making each month.
The goal is to simplify your financial life and make it much easier to keep tabs on your student loan debt.
At the time the new loan is funded the entire balance of your old loan is paid off by the new one, leaving you still owing essentially the same amount of money – but with a new interest rate and different repayment terms and conditions.
The goal, therefore, is to refinance your student loan into one that has more favorable terms and a lower interest rate, to save you money and make loan repayment easier to manage.
You can read the full details for each below and learn how to consolidate your existing student loans.
Generally, you can combine private student loans from one or more private banks or lenders into one loan made by an existing lender or a lender that specializes in consolidating private loans.
Even when you are applying through the same lender, you are basically taking out a new loan each semester or year.
By doing so, you “consolidate” your student debt into a single loan.