"There are benefits for students that are eligible for the service and the best one is you are able to alter your repayment period freely and without hassle, a slight increase will be added to the entire repayment term but this can reduce monthly payments."
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What is the Interest Rate on a Consolidation Loan?
As of February 1, 1999, both FFEL and Direct Consolidation Loans have the same interest rate, which is a fixed rate set according to a formula established by law. The rate is the weighted average rate of the current rates charged on the loans being consolidated, rounded up to the nearest one-eighth of a percent. This means the rate you'll pay wont be more than one-eighth of a percent more than the effective rate on your individual loans. The rate is fixed for the life of the Consolidation Loan.
Before February 1, 1999, Consolidation Loans had variable interest rates. For information on interest rates for these loans, contact the Direct Loan Origination Centers Consolidation Department by calling 1-800-557-7392, if you have a Direct Consolidation Loan, or check with your lender if you have a FFEL Consolidation Loan.
If you have a Stafford Loan made on or after July 1, 1995, you can reduce your consolidation rate by up to half a percentage point or more if you can consolidate before the end of your grace period.
Private Loans - Education Loans
When personal financial problems arise, taking out a consolidation loan may seem the only option but it is only worth considering if taking such action is really necessary.
What Is a College Debt Consolidation Loan?