Does consolidating loans lower payments

A Federal Direct Consolidation Loan can replace multiple federal student loans with one new loan featuring a single monthly payment.

However, it won't lower your interest rate or your monthly payments.

Use this chart to see what your approximate monthly payment would be given your income and family size under the income-driven repayment plans with the lowest monthly payment.

They may have names like “alternative” or “institutional” loans.

Many student loan borrowers have both private and federal student loans.

This tool provides information and advice for optimizing how you pay off your student loans based on some basic information about your situation.

While we can’t give you advice for your exact situation, we hope it can point you in the right direction and help you learn about some of your options. Federal student loans are loans made or guaranteed by the Department of Education.

Income-driven repayment plans ties your payment to your income and family size.

(The chart below gives you an idea of your approximate payment.) For borrowers who will make a career out of military service, Income-driven repayment plans provide another major benefit— you may be eligible for loan forgiveness after 10 years of reduced monthly payments.

You will be required to provide your servicer with proof of your active-duty status in the form of orders from your commanding officer. You may also be eligible for other benefits available to servicemembers, such as military deferment and Income-Based Repayment.

Learn more about the Servicemembers Civil Relief Act and other benefits for servicemembers with student loans from the U. This is one of the best options to stay on the road to repayment for federal student loan borrowers.

WARNING FOR SERVICEMEMBERS: Taking out a new Federal Direct Consolidation Loan will impact your eligibility for an interest rate reduction under the Servicemembers Civil Relief Act.

To get started on consolidation, contact the Department of Education (1-800-557-7392) to find out if consolidation is right for you.

They typically have names like Direct Loan, Stafford, PLUS or Perkins. Private or non-federal student loans are any other type of student loans.