Consolidating direct student loans
Next, the remaining k balance makes up 75% of the borrowers total balance, so they would multiple 75% x 3.5% = 2.625%.
The Department of Education would then combined those two numbers to come up with the weighted average interest rate of 1.625% 2.625% = 4.25%.
A student loan consolidation takes the borrowers loans and combines all the loans into one new loan with one lender, and one weighted average interest rate.
This removes the burden from the borrower of trying to keep track of many different loans, with different lenders, balances, and interest rates.
One loan is ,000 @ 6.5% interest, the second loan is ,000 @ 3.5% interest.
Because the loan with a k balance makes up 25% of the borrowers’ balance, they would multiple 25% x 6.5% = 1.625%.
If you’ve calculated your total and want Should You or Shouldn’t You Pay Off Your Student Loans Early?
Especially when you read about people who pay off anywhere from ,000 to ,000 in debt in an impossible amount of time.
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Not only is student loan Have you ever bought something only to find it discounted a few weeks later?
It’s even worse if you thought you were getting a great deal at the time.