Some people who are dealing with student loans may consider debt consolidation as a way to make payments easier.
However, a recent report from the Chicago Tribune states there are some things people should keep in mind when using debt consolidation on their student debt. First of all, loans from the government have to be consolidated separately from private student loans.
“Like matters of church and state, you have to address federal and private loans separately,” the Tribune article noted.
When it comes to student debt consolidation for government loans, people can visit the U.S. Department of Education’s website in order to apply. Debt consolidation offered for these loans does not require a credit check and comes with a fixed rate that is capped at 8.25 percent.
Debt consolidation for private loans comes with a different set of requirements. For example, the rate someone gets is based on their credit score. Furthermore, rates for private debt consolidation loans for student debt may not come with an interest rate cap.
Along with the suggestions provided by the newspaper, consumers should keep in mind that debt consolidation can be applied to other types of loans. For example, consumers facing high interest rates on their credit card debt may consider debt consolidation, which may make managing money a bit easier.