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Student Loan Consolidation is a great tool for managing your finances - providing immediate payment relief and long term benefits as this results in reduced monthly repayments and a longer term for the loan. Unlike the other loans, consolidation loans for students have a fixed interest rate for the life of the loan.
This facility provides the opportunity for significantly lower monthly payments by combining all your private student loans into one manageable loan. Consolidation loans have longer terms than other loans. Debtors can choose terms of 10–30 years. Although the monthly repayments are lower, the total amount paid over the term of the loan is higher than would be paid with other loans.
The fixed interest rate is calculated as the weighted average of the interest rates of the loans being consolidated, assigning relative weights according to the amounts borrowed, rounded up to the nearest 0.125%, and capped at 8.25%. The interest rate for a Direct Consolidation Loan is the weighted average of the interest rates on the loans being consolidated (as of the date we receive the application), rounded to the nearest higher one-eighth of one percent. This rate is fixed for the life of the loan and cannot exceed 8.25 percent.
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