Does consolidating student loans hurt my credit score
Here’s how: Federal student loan consolidation basics How to consolidate federal student loans Student loan refinancing basics Compare student loan refinance lenders When you consolidate federal loans, the government pays them off and replaces them with a direct consolidation loan.
You’re generally eligible once you graduate, leave school or drop below half-time enrollment.
If you have problems with or questions about any part of the application, you can call Federal Student Aid’s Loan Consolidation Information Call Center at 1-800-557-7392.
There are major benefits and drawbacks of federal consolidation; it’s important to understand both because consolidation can’t be undone.
[fsb-social-bar]The relationship between your student loans and your credit scores has two stages.
Applying for students loans, to begin with and then the manner and time how student loans are paid off.
So, for instance: If the average comes to 6.15%, your new interest rate will be 6.25%.
Additionally, you’ll get a new loan term ranging from 10 to 30 years.
While a credit score is not considered when applying for Federal student loans, a poor one (below 650) can stop an application for a private student loan dead in its tracks.To find the best plan for you, check out Federal Student Aid’s repayment estimators before you begin the consolidation application.The tool shows you how much you’d pay per month on the various plans.Your repayment term will generally start within 60 days of when your consolidation loan is first disbursed and will be based on your total federal student loan balance, among other factors; click on the link below for more details.
[Back to top] Applying for consolidation takes most borrowers less than 30 minutes, according to the Federal Student Aid website.
Consolidating your federal loans through the Department of Education is free; steer clear of companies that charge fees to consolidate them for you.