This means if you’ve had a jump in your credit rating, you may be in a good position to consolidate private loans. Read more: Learn how to check your credit report and score, absolutely free There’s a window of time, after you graduate but before your grace period ends, when you can still get the lower in-school interest rate. And once the consolidation goes through, you enter repayment – even if you’re still in the grace period.
Fewer payments every month may sound like a no-brainer, but consolidation’s not best for everyone. If you want to roll private and student loans together, you’ll need to explore refinancing your student loans.Compare your current monthly payments to what the payments would be if you consolidated.Keep in mind: the longer your repayment period, the more interest you’ll pay.You can lower your monthly payments and increase your repayment period.Lower monthly amounts, though, mean you pay more over the loan’s life.You’re more likely to have the same monthly payment each month.The initial interest rate (when you first sign on) may be higher.Initially, these rates may be lower than the interest on fixed-rate loans. If you plan to pay off loans quickly when interest rates are low, a variable rate’s a good option.If interest rates rise, however, your loan interest will rise with them. In August 2013, the Bipartisan Student Loan Certainty Act of 2013 became law.If you plan to repay loans over time, and you’d rather have a steady interest rate than a fluctuating one, a fixed rate may work best for you. For long-term savings, it’s best to lock in a fixed rate when interest rates are low. The Federal Direct Consolidation Loans website offers an online calculator to compare interest rates. If you have private loans, they won’t be covered under the Bipartisan Student Loan Certainty Act, but you can still lower your interest rate through consolidation.Private student loans base interest rates on your credit score. All consolidation paperwork must be processed and approved in those six months for the in-school rate.