Be consolidating

Debt consolidation can take many forms, including a personal loan, a balance-transfer credit card, a home equity line of credit (HELOC) and a debt management plan, among others.

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Consolidating your federal loans through the Department of Education is free; steer clear of companies that charge fees to consolidate them for you.

When you consolidate federal loans, your new fixed interest rate will be the weighted average of your previous rates, rounded up to the next ⅛ of 1%.

Click here to view the best debt consolidation loans for 2018 By using debt consolidation loans, you can save considerably — sometimes up to 40 percent of the total debt.

Enter your current debts into our loan calculator to start creating a plan to eliminate your debt.

The government offers plans that cut payments to 10% or 15% of “discretionary” income and offer forgiveness on the remaining balance after 20 or 25 years. If you have a large loan balance and a low income, income-driven repayment is probably your best option for the lowest monthly bill.

Private student loan consolidation, or refinancing, means replacing multiple student loans — private, federal or a combination of the two — with a single, new, private loan.

While consolidating debt certainly has merits, it is not the right choice for every individual.

Above all, the approach has to match the need and the comfort level of the borrower.

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.

If you’re considering either federal or private student loan consolidation in order to get a drastically lower loan bill, look further into income-driven repayment instead.

Consider federal consolidation if you: When you consolidate federal loans, the government pays them off and replaces them with a direct consolidation loan.

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