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The repayment term of a Direct Consolidation Loan ranges from 10 to 30 years, depending on the amount of your consolidation loan, other educational loan debt you may have and the repayment plan you select.Depending on the length of the loan, you could potentially pay more interest with a Direct Consolidation Loan over time than you would by paying off your existing federal student loans, unless you pay off the consolidation loan more quickly than required.But some private lenders, including Common Bond, allow you to defer payments if you lose your job or go back to school.Choosing between federal loan consolidation and private loan refinancing can feel overwhelming at times If you have any questions about your student loan options, please contact the Common Bond Care Team.Most federal student loans are eligible for consolidation, but you can’t use a Direct Consolidation Loan to consolidate student loans from private lenders.A Direct Consolidation Loan has a fixed interest rate for the life of the loan.Consolidating your student loans can be confusing, but it doesn’t have to be.
These plans help you lower your monthly payments by allowing you to pay a portion of your discretionary income, which is the money leftover after you cover necessities, to your student loans instead of the standard monthly payment.
Tom Anderson is content manager at Common Bond, a values-driven fintech company that is reimagining the student loan experience.
The company refinances student loans to provide a better experience through lower interest rates, personal customer service, a simple application process and a strong commitment to social good.
Drawbacks of Consolidating Federal Student Loans A Direct Consolidation Loan makes sense if you want to use an income-driven repayment plan or participate in a loan forgiveness program.
But a Direct Consolidation Loan doesn’t lower the interest rate on your student loans nor can you use it to refinance private student loans.