Is consolodating my student loan smart

You can’t consolidate private loans in the federal Direct Consolidation Loan program, but some private lenders allow you to consolidate federal and private loans together.

The Direct Consolidation Loan program is the right choice if your goal is to simplify the process and keep your options open for the many repayment plans available for federal loans. Your rate is determined by the weighted average of the interest on the loans being consolidated rounded up to the nearest one-eighth of 1%.

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Consolidating your student loans means combining several loans into a single loan, meaning all those monthly payments get rolled into one. A Direct consolidation loan allows you to consolidate multiple federal education loans into a single loan so you’ll have a single loan payment to make each month, instead of three or four or more.I contacted student loan guru Mark Kantrowitz at Fin Aid.org, who says just three lenders still offer consolidation: Chase, Student Loan Network, and Wells Fargo. You should also know that there are no fixed rates on consolidated private loans; your interest rate will probably be tied to a benchmark like the prime rate, so when that rises, so will the rate on your loan.Finally, if you have a solid job and a solid credit score, think about looking into a personal loan at a bank or credit union.By increasing your loan repayment period, you’ll have more payments to make and will end up paying more in interest.There are no prepayment penalties with a Direct consolidation loan, so feel free to pay more when you have the extra cash — it’ll help you save on interest. According to the Education Department, federal loans eligible for a Direct consolidation loan include: Subsidized and unsubsidized Direct loans, subsidized and unsubsidized Stafford loans, Direct PLUS loans, PLUS loans from the Federal Family Education Loan (FFEL) Program, Supplemental Loans for Students (SLS), Perkins loans, Health Education Assistance Loans (HEAL), federal nursing loans and some existing consolidation loans.You might not be able to score a deal for the entire amount, but if you can get a fixed-rate personal loan to pay off some of the variable-rate student loan debt, that will offer you more stability.

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