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Student loan consolidation programs allow for a borrower’s loans to be paid off and a new consolidated loan created. These programs simply loan repayment by combining several types of Federal education loans into one new loan. The interest rate may be lower than on one or more of the underlying loans. Additionally, the monthly payment amount on a consolidated loan is usually lower and the amount of time to repay may be extended beyond what was available in the separate loan programs. These features generally result in more manageable debt and should make borrower’s less likely to default on the loan. If you have a federal student loan, you may have already received marketing materials from various lenders promoting their consolidation programs.

If all your loans are with the same lender and it offers loan consolidation, you must stick with that lender. Likewise, borrowers with just one loan can lock in the fixed rate, but must go through the company that holds the loan. Borrowers with loans from multiple lenders can consolidate with any. There are two particular features to look for when searching for a loan consolidation program. First, many lenders will cut your interest rate if you agree to have payment deducted automatically from your checking account. Likewise, they may cut your interest rate after you have made several on-time payments. For legitimacy purposes, you may also want to look out for lenders with toll-free customer service phone numbers and adequate counseling programs.

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