Consolidating student loans from canada
If you’ve built a positive credit history, you may benefit by getting a lower interest rate, which will help reduce the cost of your loans.Private lenders may also offer choices for how many years you take to repay the loan; you might select a shorter repayment period to save on total cost or a longer repayment period if you need lower monthly payments.Because you use your new loan to pay back multiple existing debts, refinancing allows you to consolidate debt in addition to changing loan terms.Read More: Can You Refinance Student Loans More Than Once?The first and most important thing to understand is that you lose access to federal student loan benefits – such as Public Service Loan Forgiveness and income-driven repayment plans – when you refinance federal student loans with a private lender.
The rate isn’t based on your credit history, so it could be lower or higher than what you would be offered by a private lender.Ideally, the interest rate will be lower and the repayment terms will be better for you.Otherwise, it doesn’t make sense to refinance your loans.The impact of either refinancing or consolidating student loans will vary depending on whether you have private student loans or federal student loans. consolidation guide: When you refinance student loans, you are taking a loan from a private lender to repay existing student loan debt.The government doesn’t offer refinance loans, so you can’t get one through the Department of Education.
Consolidation is the process of combining student loans into one loan.