Cost of consolidating student loans oksana dating
The ability to pause payments: Federal loans come with forbearance and deferment programs that let you take a break from payments if you lose your job, get sick or go back to school.If you don't know when you'll be able to get back on track, though, consider a longer-term solution like switching to income-driven repayment.You may even consolidate as a way to get out of student loan default, as long as you either make three on-time payments beforehand or choose an income-driven repayment plan. Flexible repayment options: Federal student loan borrowers can choose among several repayment programs.The standard payback period is 10 years, but there are other programs, called income-driven repayment plans, that tie loan bills to income.Refinancing has the added benefit of reducing the cost of your loans if you qualify for a lower interest rate or monthly payment.Be sure to weigh the tradeoffs before refinancing, though, especially if you include federal loans in the bundle.
Variable interest rates may go up: Most refinance loans offer both variable and fixed interest rates.
Choosing one could make your payments much more affordable.
Any remaining debt after 20 or 25 years of on-time payments toward an income-driven plan will be forgiven, though you'll pay tax on that amount.
In either case, you'll end up with a single loan payment, which can streamline your bills if there are several creditors billing you for separate loans each month.
One payment could make you more likely to pay on time, which is the biggest factor in maintaining a strong credit score.
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But variable rates are just that: variable, which means they can go up or down depending on economic conditions.