Consolidating student loans through bank

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Unlike federal student loan consolidation, refinancing is available for both federal and private student loans.A bank, credit union or online lender will pay off the loans you want to consolidate and issue you a new private student loan for the total balance.Refinancing has the added benefit of reducing the cost of your loans if you qualify for a lower interest rate or monthly payment.Be sure to weigh the tradeoffs before refinancing, though, especially if you include federal loans in the bundle.If you're eligible for a lower rate than you currently pay, you could save a significant amount on interest, making it an especially appealing option for borrowers with high interest private loans.Before taking the plunge to consolidate and refinance student loans with a private lender, consider the following: Your credit score matters: Those with high credit scores will get the lowest interest rates on a refinance loan.You'll be a strong candidate if your credit score is in the good-to-excellent range, which is 670 or higher using the FICO credit scoring model.

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You can apply for a federal direct consolidation loan for free online through the U. Your credit scores, income and other financial factors are not used to determine your eligibility, and you don't need a cosigner.Federal student loan consolidation is, as it sounds, available only for federal loans, or those the government makes.You do not need to meet credit requirements to consolidate federal loans, and after consolidating you'll pay a single bill to your student loan servicer, the company that accepts payments on behalf of the government. Your new interest rate will be a weighted average of your previous loans' rates, rounded up to the next one-eighth of 1 percent.But the longer you take to pay off a loan, the more interest you'll pay over time.The sooner you can pay off your student loans, the sooner you can divert more of your savings to retirement, a home down payment or college savings for your kids.

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