Over 10 years, you’ll pay about ,000 in interest on your original principal of ,000. Under your new loan terms, your loans will be consolidated into one ,000 loan—and you’ll have one new fixed interest rate, which is determined by taking the weighted average of the interest rates on your previous loans, and rounding up to the nearest one-eighth of one percent. Now, entering your loan information into a loan consolidation calculator, you’ll find that consolidating your loans gives you a new repayment period, which is figured based on the amount you owe – the more you owe, the longer this repayment period will be.
It can vary from 10 to 30 years, but in this case it’s going to be 25 years. That’s a lot less than the 0 a month you would have spent on a standard 10-year repayment plan.
For example , if a borrower had a ,500 loan at 3.4% and a ,000 loan at 6.8%, the interest rate on the federal consolidation loan would be This would then be rounded up to the nearest 1/8th of a point, or 5.375%.
Assuming a 10-year repayment term, the monthly loan payments on the 3.4% and 6.8% loans would be .81 and 5.08, respectively, a total of 8.89, while the monthly payment on the consolidation loan would be 8.84.
Then see what the monthly payment would be with a consolidated loan.
Try adjusting the terms, loan types or rate until a consolidation plan fits your needs - and most importantly your budget!
student loan is subject to completion of a loan application/consumer credit agreement, verification of application information, credit qualification, and a benefit to borrower determination.
Entering these numbers into the loan calculator at gov—on a standard 10-year repayment plan, you’re going to be paying a little over 0 a month.
Consolidating your student loans Let’s take a look at a few of the pros and cons of consolidating your student loans.
If you have multiple student loans, consolidation can offer some simplicity to your repayment.
The interest rate on a consolidation loan is between the highest and lowest interest rates of the loans being consolidated.
Through June 30, 2013 the interest rates on a consolidation loan were capped at 8.25%.