Consolidating tuition loans

08-Nov-2017 00:00

“Interest was 6.8% on the unsubsidized loan and 3.4% on the subsidized one,” she recalls.Despite working full-time throughout school and graduating with ,000 in debt, Braggs kept up her determination to pay down her loans as quickly as possible.

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“That might not seem like much because I worked full-time through school and paid 0/month through the majority of my education,” she says,” but I also still owed over ,000 on my car loan,” so debt obviously weighed heavily on her mind.If you’re considering consolidating your loans, here are some downsides you should be aware of.#1 Increased Interest Payments – When federal student loans are consolidated, the interest rates are weighted according to loan balances and then rounded up by one-eighth of a percent.#3 Repayment Options Limited Once that loan is paid off, the amount of that monthly payment would be dedicated to the next highest interest rate loan.This can allow you to pay off all of your loans faster and for a lower cost.

“That might not seem like much because I worked full-time through school and paid 0/month through the majority of my education,” she says,” but I also still owed over ,000 on my car loan,” so debt obviously weighed heavily on her mind.

If you’re considering consolidating your loans, here are some downsides you should be aware of.

#1 Increased Interest Payments – When federal student loans are consolidated, the interest rates are weighted according to loan balances and then rounded up by one-eighth of a percent.

#3 Repayment Options Limited Once that loan is paid off, the amount of that monthly payment would be dedicated to the next highest interest rate loan.

This can allow you to pay off all of your loans faster and for a lower cost.

But once your loans are consolidated, this avenue is closed off to you.