Consolidating student loans advice

A LOT MORE But by comparing the pros and cons of each repayment plan available, REPAYMENT PLANS you’ll be able to find out which option is right for you.BETTER MONEY HABITS® BANK OF AMERICA WITH KHAN ACADEMY BETTERMONEYHABITS.DEFERMENT OR FORBEARANCE Now, if you have private student loans, STUDENT LOAN PRIVATE CONSOLIDATION LOAN, BANK you also have private loan consolidation options.

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$81,250 TOTAL, $20,250 MORE $61,000 TOTAL You’ll also have new loan terms.

STUDENT LOAN This means that you may miss out on some of the repayment benefits you might have been eligible for on your previous loans, like interest free deferment on subsidized loans INTEREST-FREE DEFERMENT DEFERMENT, SUBSIDIZED, 0, 1 or loan cancellation for special circumstances.

300, 850, BAD, FAIR, EXCELLENT $50,000 PRIVATE LOANS @5.4% INTEREST So if you have a lower credit score, you might be looking at a higher interest rate.

@6.5% INTEREST RATE If you’ve just left school, CREDIT SCORE 550 you probably haven’t had the chance to build up a good credit history yet, so with private consolidation PRIVATE LOAN CONSOLIDATION LOWER MONTHLY PAYMENT you might get a simpler, lower monthly payment, but you could end up paying more in combined interest.

Essentially what happens when you consolidate BANK is that all of your original loans are paid off by your lender and replaced with a single new loan with new terms.

STUDENT LOAN And you can often get a lower monthly payment 0, 10 YEARS, PRINCIPAL, INTEREST because you will have a longer repayment period— 0, 25 YEARS so there are some trade-offs to keep in mind.

,000 FEDERAL LOANS Fifteen thousand dollars in subsidized loans SUBSIDIZED, ,000 PRINCIPAL at a three point five percent interest rate, @3.5% INTEREST and then two different unsubsidized loans: UNSUBSIDIZED a loan of twenty thousand dollars ,000 PRINCIPAL with a four percent interest rate, @4% INTEREST and a loan of fifteen thousand dollars ,000 PRINCIPAL with a five percent interest rate.

@5% INTEREST Now as you can see, BILL keeping track of these loans might get complicated— especially if you’re making payments to different loan servicers.

@4.15% INTEREST In this case, that’s four point two five percent.

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