Consolidating your private student loans

If you’re using the paper application, you’ll mail the application to the servicer of your choice. You could also choose the Income-Based Repayment Plan, the Pay As You Earn Repayment Plan or Revised Pay As You Earn Repayment Plan as long as your consolidated loan doesn’t include a parent PLUS Loan.With ICR, IBR, PAYE and REPAYE, your monthly payment will be 10 to 20 percent of your annual discretionary income, the difference between your actual income and 100 to 150 percent of the federal poverty guideline for your family size and state.While both options involve combining multiple loans into one, private loan consolidation is generally referred to as refinancing.

When you refinance your loan, you can choose a five-, seven-, 10-, 15- or 20-year term.

Common Bond will match your federal loan deferment period if you graduated the same year you apply and your loans are currently in grace period deferment.

This guide provides an in-depth explanation of the differences between federal loan consolidation and private loan refinancing, the pros and cons of each and insight into which options are best for different situations. News compared private lenders to come up with recommendations for different kinds of borrowers.

There are a variety of private lenders that offer student loan refinancing, each with different potential interest rates, loan terms and features. When you consolidate your student loans, you essentially combine multiple loans into one.

By contrast, federal loan consolidation won’t change how much interest accrues, and eligibility doesn’t depend on your creditworthiness. You can consolidate your federal student loans and refinance your private loans, or consolidate some of your federal loans and refinance others.

Or, you may research your options and determine you shouldn’t use either.Here are some additional requirements: If you just graduated with three federal Direct Subsidized loans, one for ,000, one for ,000 and one for ,000, and you get a job earning ,000 a year in San Francisco, you’ll pay off the loans in 10 years and pay a total of ,409 once you start making payments under the Standard Repayment Plan.Kantrowitz encourages borrowers to compare both the monthly payment and the total payments over the life of the loan when considering consolidating or refinancing loans.Your monthly payments will be fixed on the standard plan, or start small and slowly increase on the graduated plan.If you’re consolidating loans that are in a grace period, you can ask the servicer to delay processing your request. Once you’ve filled in all the required sections, you’ll have to sign and submit the application.After making payments on income-driven plans for 20 to 25 years, any remaining loan balance may be forgiven.