Consolidating canada student loans
If you’re one of the many young Canadians dealing with high student loan debt, I’ve put together a list of possible resources for you to tap to reduce your debt burden.Before you jump to your province and start going click happy, there are a few things you should know: First, most of these programs are for publicly funded student loans.
If your refinance application is approved, you (and them) can potentially save thousands of dollars.I took advantage of New Brunswick student loan forgiveness when I wiped out $16,000 of my $42,000 in student loan debt.Without that loan forgiveness program and others like it, there’s no way I could have paid off $38,000 in two years.You may be contacted by private companies that offer to help you apply for a Direct Consolidation Loan, for a fee. There’s no need to pay anyone for assistance in getting a Direct Consolidation Loan. The fixed rate is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest one-eighth of one percent. The loans that were consolidated are paid off and no longer exist.Pair that with high housing costs and low wages, and it’s no surprise that most millennials are putting off major life milestones because they simply can’t afford it.
There is a small glimmer of hope for those struggling with provincial and federal student loans, and it comes in the form of student loan forgiveness.
Once your loans are combined into a Direct Consolidation Loan, they cannot be removed.
If you want to lower your monthly payment amount but are concerned about the impact of loan consolidation, you might want to consider deferment or forbearance as options for short-term payment relief, or consider switching to an income-driven repayment plan.
allows you to consolidate (combine) multiple federal education loans into one loan. Top Private education loans are not eligible for consolidation, but for some Direct Consolidation Loan repayment plans, the total amount of your education loan debt—including any private education loans—determines how long you have to repay your Direct Consolidation Loan.
The result is a single monthly payment instead of multiple payments. Direct PLUS Loans received by parents to help pay for a dependent student’s education cannot be consolidated together with federal student loans that the student received.
Since interest rates are likely to remain low for the next few years, you have the unique opportunity to save thousands of dollars. Instead of paying $1,151 each month, you will pay only $1,085. If you wait even a few years after repayment begins, you will not save as much in interest because you will have already paid a significant amount of interest on the loan; you pay more interest (and less principal) in the beginning of the loan repayment period than at the end of the loan repayment period.