Q: What is a Consolidation Loan?
A: A Federal Consolidation Loan combines several existing federal student loans into one new loan. You can lock in a single fixed interest rate and enjoy the convenience of one lower monthly payment.
Q: How is the interest rate calculated?
A: The interest rate for a Federal Consolidation Loan is set according to federal law and is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest one-eighth of one percent. This rate is fixed for the life of the loan and cannot exceed 8.25%.
