Student loan debt can become overwhelming if you are juggling multiple payments, not to mention the significant amount of your income that is going toward making the minimum monthly payments. Many people consolidate their federal and private student loan debt to eliminate the multiple payments and reduce the monthly payment amount.

Membership Eligibility

The Navy Federal Credit Union requires a membership in order to be eligible for their student loan consolidation services. Members must have served or are currently serving in any branch of the military or Department of Defense (or family member of current active duty or veterans). Although membership is limited, Navy Federal Credit Union has extremely competitive rates for federal and private student loan consolidation.

Consolidation Loan Details

Navy Federal Credit Union offers fixed and variable annual percentage rates (APR). The APR’s may be as low as 3.55% for variable and 4.00% for fixed, and the loan term ranges from 5 to 15 years. The variable rate will fluctuate throughout the loan term, and the fixed rate remains the same throughout.

The APR’s offered are competitive rates, so if you can get the minimum APR you may end up saving a significant amount of money in interest charges. You can save money on interest if the consolidation loan has a lower APR and interest rate than what you are currently being charged on your student loans.

Disadvantages of Consolidating Federal Student Loans

Although there are many advantages to consolidating your student loans, there are some disadvantages to consider as well. If you consolidate your federal student loans, there are certain benefits you may lose, such as forbearance and deferment options, in addition to some loan-forgiveness programs.

Despite the disadvantages, many people choose to consolidate their federal student loans to make the payments more manageable and for the convenience of one monthly payment. Still, it is important to analyze your personal situation to determine if consolidation is the best option for you.

Understand the Details Before You Apply

If you are considering applying for federal student loan consolidation, be sure to understand the loan fees and terms, including the interest rate, APR and monthly payment amount. It is essential to make sure you can afford the minimum monthly payments, because you do not want to default on a student loan consolidation. Take some time to read the fine print before you sign any loan agreement.