Consolidating private student loans 2016

13-Sep-2017 14:13

And if you go too long without making a payment on your federal loans, they’ll default and the government can garnish your wages and tax refund.If you default on a private loan, your lender can send a debt collector after you or sue you in court to collect repayment, potentially via wage garnishment.For example, if you initially qualify for a loan at a 15.99% annual percentage rate, adding a co-signer might reduce that rate to 10.99%, Toms says.Direct pay discount: Freedom Plus offers an option to have the money you borrow go directly to pay off creditors, a feature that few other online lenders offer.Retirement assets discount: Freedom Plus rewards applicants who are responsible about planning for retirement.Lenders don’t usually consider retirement assets as a factor when approving loans, “but we believe in planning, and we will reward borrowers [who have retirement asset plans] with a lower rate,” Toms says.

You should make the minimum payment on your student loans each month, but make sure you also meet other financial goals, including retirement.

You don’t have to use this direct payment option, but doing so may improve your chances of successfully paying down your debt and could reduce your interest rate by one to three percentage points.