Consolidating debt including student loans

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Parent PLUS borrowers most consolidate their loans into the federal Direct Loan program if they want to enroll in the only earnings-based plan available to them, income-contingent repayment.Consolidation also opens up the door to extended repayment plans, in which your term can stretch up to 30 years depending on how much debt you have.If you've ever seen a commercial for a debt consolidation service, you probably know that many of these services encourage you to consolidate all of your debt in one loan usually by taking out a home equity loan or refinancing your home to consolidate your debt.Debt consolidation can work well if you're having trouble with a lot of high-interest debt and qualify for a home equity loan or refinance.Here are four things to consider before you make the leap.

Borrowers who graduated before 2010, when the government shifted to Direct Loans, for example, need to consolidate their loans to access the latest income-driven plan, Revised Pay As You Earn.

That is a good strategy, and a fixed-rate home refinance is a very good way to accomplish that goal of getting your debt under control.

It's important, though, to make sure that you are consolidating the right debts and not making more difficulties for yourself by consolidating low-interest debts, or even no-interest debts, into a debt-consolidation plan.

If you have high-interest debt that will be paid off in less than a year, it's definitely worth the effort to calculate the difference in cost, overall, of paying the debt separately and including it in a debt-consolidation plan.

Financial difficulties are stressful, and you naturally want to get out from under as much of your existing debt as possible, especially the debt with high interest that seems to be eating you alive.

The immediate peace of mind you gain may be even greater.

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