Reconsolidating loans

08-Apr-2020 06:16

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You can get a order a report for free from Annual Credit After you receive your credit report, carefully check all the information for accuracy.To consolidate a defaulted loan, you must apply through Student You can submit your application online or through the mail after downloading and printing a paper application.In theory, consolidating a number of higher-interest loans into one lower-interest loan makes sense.

Banks and private lenders sometimes try to get student loan borrowers to consolidate their federal student loans into a private consolidation loan (or to combine both federal and private student loans into a new, private consolidation loan) by promising “one low easy payment.” But consolidating your federal loans into a private loan is almost always a bad move.

Getting out of default is important if you want to qualify for certain federal repayment plans, borrow new loans to go back to school, or improve your credit rating.

Consolidating your loans is a lot like refinancing a mortgage; it creates a new loan with different terms. Be aware, though, that you could lose certain benefits—like reduced interest rates or repayment incentive programs—that are available under the loans that you’re consolidating.

One area you’ll want to pay close attention to is your accounts and payment history.

It could throw off your repayment plan if the information is inaccurate.

You’ll lose access to federal repayment plans, as well as forbearance, deferment, and cancellation options.