Advice for consoladating school loans

You’re generally eligible once you graduate, leave school or drop below half-time enrollment.Consolidating your federal loans through the Department of Education is free; steer clear of companies that charge fees to consolidate them for you.These processes are often confused, but they’re very different.Here’s how: » SIGN UP: Get a free plan to ditch your debt Federal student loan consolidation basics How to consolidate federal student loans Student loan refinancing basics Compare student loan refinance lenders When you consolidate federal loans, the government pays them off and replaces them with a direct consolidation loan.You typically need a credit score at least in the mid-600s to qualify, and rates range from around 2% to more than 9%. You can consolidate all, just some, or even just one of your student loans.You have to complete the application in a single session, so do your research before you start.When you’re ready, go to studentloans.gov, log in, and follow these steps to apply: You can consolidate all your federal loans or just some of them.

If you have problems with or questions about any part of the application, you can call Federal Student Aid’s Loan Consolidation Information Call Center at 1-800-557-7392.

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.

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.

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.

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