The interest rates on federal student loans change every year in July. Before each summer you will be able to find out if the rates will be going up or down. If they are going up and you consolidate before then you can lock in the current lower rate.
This is not the only thing you should know going into consolidation, however. A great tool at your disposal is the student loan consolidation calculator. You can find one on virtually any Web site that offers a wide array of student loan information.
The calculator will ask you for information pertaining to the loans you have taken out. It will then provide you with the total amount you have taken out in loans, what your new interest rate and monthly payment would be, the length of the repayment period and the total cost to you (assuming you use the entire repayment period to pay off the loan).
Now you know what you are facing when choosing a specific consolidation loan. You will see exactly how much money you will be paying. This will give you a blueprint of your financial obligations, both short and long-term.
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|Jennifer Mathes, Ph.D.|