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How student loan debt consolidation works

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Consolidation simplifies your student loan debt into a single loan.

When you consolidate student loans, you smush all of your federal student loan debt into a single consolidation loan. It's as simple as that.

Having a single loan to pay off makes it easier to manage your payments, and you can often get a better interest rate than what you might be paying on credit cards and car loans.

Credible is an online marketplace offering personalized loan options based on your unique financial situation.

When you consolidate your debt with a personal loan through Credible, you can roll your payments into one monthly installment. Find a lower interest rate and pay down your debt faster with Credible today.

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Consolidating student loan debt: pros and cons

It doesn't reduce what you owe. But instead of making multiple payments, you'll make one payment each month.

That streamlining isn't the only benefit.


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Consolidation usually works out to a lower monthly payment.

When you consolidate federal student loans, you can lower your monthly payment by changing the repayment term.

Automatically after graduation, borrowers are enrolled in a 10-year standard repayment plan. Some consolidation loans can stretch repayment out over 30 years — and shrink your monthly payment.

And here's another benefit: As with all other federal student loans, consolidation loans come with fixed interest rates that don't change. You'll never be surprised to learn that your rate is going up.


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Consolidation can raise your student loan interest costs.

One negative of a longer-term consolidation loan is higher interest costs.

You'll pay a lot more total interest over a 30-year term than a 10-year term. But if you can't afford your current collection of monthly payments, paying more interest over a longer-term consolidation loan may be very appealing.

Another downside is that consolidation won't reduce or wipe away your student debt, the way a couple of other programs can.

Is consolidation right for you?

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You might be able to eliminate some of your student debt if you work for a nonprofit or government agency.

Before you consider consolidation, see if you qualify for either an income-driven repayment plan or public service loan forgiveness.

An income-driven repayment plan can reduce your total monthly payment for student loans — by limiting it to a percentage of your income. And after you make payments under the plan for 20 to 25 years, any remaining loan balance will be forgiven. Off the books!

Public service loan forgiveness also can eliminate some of your student debt, if you make 10 years' worth of monthly payments while working for a government or nonprofit organization. Your remaining balance will be canceled, tax-free.

So you see, student loan consolidation isn't always the answer. It may be worth it only if you can't handle your current monthly payment, or if your income or employment doesn't qualify you for either income-driven repayment or public service loan forgiveness.

This Company Will Help Nearly Anyone Get Rid of Credit Card Debt

Do you feel like paying off your credit card is a constant grind, with no end in sight? You’re not alone. A personal loan offers lower interest rates and fixed payments, making it a smart choice to consolidate high-interest credit card debt. It helps save money, simplifies payments, and accelerates debt payoff.

Credible is a free online service that shows you the best lending options to pay off your credit card debt fast — and save a ton in interest.

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