Previously, the interest rate would have been capped at 8.25%.A consolidation calculator may be used to calculate the interest rate on a federal consolidation loan.Also, federal student loans have numerous benefits and protections that are not available on most private student loans, such as generous deferments and forbearances, income-based repayment and public service loan forgiveness provisions.

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The private consolidation loan has a new interest rate based on the borrower’s (and cosigner’s) current credit history.

This interest rate may be higher or lower than the weighted average of the current interest rates on the borrower's private student loans.

Although student and parent borrowers are each eligible to consolidate their loans, they may not consolidate their loans together.

Married borrowers may no longer consolidate their loans together.

While one could use a private consolidation loan to refinance federal education loans, this is generally not recommended.

Usually the federal education loans have lower fixed interest rates, so a private consolidation loan may cost the borrower more.

The following types of loans may be consolidated, including loans made in the FFEL program and the Direct Loan program.

Private student loans may not be included in a federal consolidation loan.

The interest rate on the federal consolidation loan would be This would then be rounded up to the nearest one-eighth of a point, or 3.75%.

Since July 1, 2013, the interest rate on new federal consolidation loans is no longer capped.

Because there are no penalties for prepaying the loan in full or in part, borrowers may make larger monthly payments or extra payments if they wish.