About consolidating student loans Chatsex for mobile
(Sidebar: please read this for more info about REPAYE and why it’s generally a good idea of residents if you’re not already familiar with the program).And there’s a double reason if you’re considering PSLF.Consolidating your federal loans into a DIRECT Consolidation from the federal government (as opposed to private refinancing, discussed here) does make things look nice and tidy in that you’ll now have a single loan with a weighted-average interest rate based on the rates of the individual loans it replaced, but this paperwork trick isn’t particularly meaningful in and of itself. In fact, a slight rounding change could give you a trivially higher rate (it’s rounded up to the nearest one-eighth of 1%).But there are definitely a few reasons to consider consolidating your loans, early as you can, in large part due to government’s newest income-driven repayment plan: REPAYE.So if you want to try to have your Perkins loans forgiven, then consolidation is the only way.Consolidation is also the only way to have Perkins loans included within an income-driven repayment plan, which would reduce the amount you pay monthly if you’re worried about cash flow problems (Perkins are normally put on their own separate 10-year repayment.).Normally, you have a 6-month grace period starting at the end of graduation before you begin paying back any money.So if you graduate at the beginning of May, you normally won’t be paying anything until November.
Because the consolidation is a new loan, the monthly payment count resets to zero.For the following example, let’s assume you file for consolidation at the end of school in May, which is then processed in June.So you’ll probably lose one month out of the 6-month grace to the consolidation process. This assumes, of course, that you don’t have a low-debt/high-income mismatch and will be receiving one in the first place.During this grace period, interest continues to accrue and is then capitalized (added to the principal) when you enter repayment.Of course, you also won’t start making any payments toward PSLF until 6 months after graduation either.
Any payments you’ve made towards your loans prior to this do not count toward the PSLF required 120.