Many college graduates find it challenging to manage their multiple federal and private student loan debt due to the multiple payments and the high monthly payment amounts. It can be difficult to keep the payments and varying amounts due, so some people consolidate their student loan debt.
Consolidation allows you to eliminate the multiple payments, as you are only responsible for the one consolidation loan installment. In addition, consolidating your student loan debt allows you to lower your monthly payments, although your repayment term may be extended, so you will be making payments for a longer duration, sometimes up to 40 years.
Federal Student Loans
If you have multiple federal student loans, you will not be able to consolidate them through a Citibank loan. There are only a few select lenders permitted by the federal government to offer federal student loan consolidation, and Citibank is not one of them. You may want to check the Department of Education website for additional information for federal loan consolidation services.
Private Student Loans
Citibank does offer consolidation options for private student loans through a personal loan that you can use however you like. They offer loans up to $50,000, and you must have an annual income of at least $10,500 to qualify for any loan amount, although they will analyze your ability to repay the loan. Annual percentage rates (APR) vary from 7.99% to 17.99%.
Private student loans typically have a low APR, so it is important to compare the rate of your loan to the rates you are currently being charged. If the APR of the consolidation loan is higher than the rates on your student loans, then it may not be a good idea to consolidate, because your monthly payments may not be much lower, and you will end up paying significantly more in interest than you would without consolidating.
Understand Your Options
If you are having trouble making your student loan payments, consolidating your loans is a good option to consider if you can get a reasonable interest rate or APR that is similar to or lower than the rates you are currently being charged. Many people find great relief once they have consolidated their student loans, because they only make one monthly payment, and in most cases, the payment amount is lower than before consolidating.
Consolidating your student loan debts can reduce your monthly payments, but it is also important to consider the longer repayment term as well.