Consolidating loans can help cut debt

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Learn more"Term" refers to the length of the loan, typically in years.

In general, the shorter the term, the lower the interest rate and the higher the monthly payments.

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Often, the introductory rate on a variable-rate loan is lower than that of a fixed rate loan, though it has the potential to increase later.

When you apply, most banks and lenders will look at your credit score, annual income, savings, and college degree type (or certificate of enrollment if still in school).Fixed-rate loans often have higher rates than the introductory rates on variable loans.However, borrowers have peace of mind knowing their monthly payments will always be the same amount.Borrowers typically have the option to make interest-only payments during this period in order to prevent accruing interest from increasing their balance.Many parents take out "Parent PLUS" loans to pay for their children to attend college.

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