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What to do?
all of your federal student loans into
one loan. Here is how it works:
- by consolidating the two loans under
one federal consolidation loan, you
can extend the repayment term up to
15 years or more depending on
the amount being consolidated
- longer repayment
terms can lower your monthly payment,
you should note however, that longer
repayment terms mean that you will pay
more interest over the life of your
loan
- though your repayment term may be
longer, you can payoff
your loan at anytime without penalties — even small amounts applied to
the principal each month can result
in dramatic savings
click
to download our loan repayment schedule
- federal consolidation allows you to
lower your payments now, which means
that less of your
monthly income is going towards debt
- lower debt payments
means a lower debt-to-income ratio — an important ratio when financing
your new home or auto
view
this calculator that illustrates the
debt-to-income ratio
- when circumstances allow, you
can pay off your entire loan without
penalty
Note: The chart is for example only. Your actual
savings my differ. The numbers are estimated
as follows:
Current
Payment: uses a 7.14% interest
rate under a standard 10 year repayment
plan. This rate is for loans first disbursed
between July 1, 1998 and June 30, 2005.
Loans disbursed before this period have
a slightly higher interest rate.
Consolidated
Payment: calculated under the
Federal Consolidation Program using an
example of a 7.25% with extended repayment
terms.
The
In-Grace Consolidated Payment: calculated under the Federal Consolidation
Program using the in-grace discount of
6.625% with extended repayment terms.
Note
that extending the repayment period increases
your total interest costs because you
will be making smaller payments over a
period of time. You can however prepay
all or any portion of your outstanding
balance without penalty reducing the total
amount of interest paid over the life
of the loan. |
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