Plus, if you have debt left over when the repayment term is up, it will be forgiven (but taxed as income). That means the interest and monthly payment can change according to market conditions.
Switching to a fixed-rate loan may give you a slightly higher interest rate, but it will remain the same for the duration of your loan.
If your goal is to save money on your student loans, refinancing may be a better option for you than consolidation.
Often, Direct Consolidation is required in order to enroll in federal programs such as income-based repayment.
While the terms are sometimes used interchangeably, consolidating your loans is different than refinancing them.
Fill in the loan amounts, credit card balances and other outstanding debt.
Then see what the monthly payment would be with a consolidated loan.However, you can refinance both federal and private loans.Plus, refinancing is only available through private lenders, so you lose the federal benefits associated with any federal loans you refinance.If you consolidate loans other than Direct Loans, you can become eligible for income-driven repayment plans.Under these plans, the government extends your repayment term and caps your payments at a percentage of your income.Try adjusting the terms, loan types or rate until a consolidation plan fits your needs - and most importantly your budget!