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What to do?
all of your federal student loans into
one loan. Here is how it works:
- by consolidating the two loans under
one federal consolidation loan, you
can extend the repayment term up to
15 years or more depending on
the amount being consolidated
- longer repayment
terms can lower your monthly payment,
you should note however, that longer
repayment terms mean that you will pay
more interest over the life of your
loan
- though your repayment term may be
longer, you can payoff
your loan at anytime without penalties even small amounts applied to
the principal each month can result
in dramatic savings
click
to download our loan repayment schedule
- federal consolidation allows you to
lower your payments now, which means
that less of your
monthly income is going towards debt
- lower debt payments
means a lower debt-to-income ratio an important ratio when financing
your new home or auto
view
this calculator that illustrates the
debt-to-income ratio
- when circumstances allow, you
can pay off your entire loan without
penalty
Note: The chart is for example only. Your actual
savings my differ. The numbers are estimated
as follows:
Current
Payment: uses a 7.14% interest
rate under a standard 10 year repayment
plan. This rate is for loans first disbursed
between July 1, 1998 and June 30, 2005.
Loans disbursed before this period have
a slightly higher interest rate.
Consolidated
Payment: calculated under the
Federal Consolidation Program using an
example of a 7.25% with extended repayment
terms.
The
In-Grace Consolidated Payment: calculated under the Federal Consolidation
Program using the in-grace discount of
6.625% with extended repayment terms.
Note
that extending the repayment period increases
your total interest costs because you
will be making smaller payments over a
period of time. You can however prepay
all or any portion of your outstanding
balance without penalty reducing the total
amount of interest paid over the life
of the loan. |
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