Consolidating student loans can help you pay off your loans sooner if you obtain a lower interest rate, a similar or shorter time frame and you continue to make the same total monthly payments. There are a number of private lenders who consolidate, including banks, credit unions and online lenders like SoFi, Earnest and Commonbond. Consolidating private students at a lower rate often makes sense if the fees aren't high, as long as you run the numbers to make sure that you'll pay less over the total remaining life of the loan. Use this Debt Blaster calculator to see how much sooner you could pay them off if you have a lower rate.
However, if your wife has federal student loans, be cautious. There are significant drawbacks to refinancing federal student loans. You lose the ability to negotiate a lower payment, deferral or forbearance in the event of loss or reduction in income. Additionally, for those who are teachers or public service employees, you lose access to certain loan forgiveness programs.
How to decide whether it's worth losing the flexibility of federal loans in order to consolidate at a lower rate? If her career and income are stable, or if you don't need her income for living expenses, the risks are lower. If your wife would eligible for loan forgiveness, it's not a good idea.
If you're just looking for the convenience of one monthly payment, but don't want to lose the flexibility of federal loans, you can consolidate your federal loans into one payment. Your interest rate will be weighted rate based on your original loans.
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