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NEWSLETTER: COLLEGE_PLANNERSign up for COLLEGE_PLANNER and more View Sample 1. One of the myths of consolidation is that it makes your debt less expensive by lowering your interest rate.Historically, that may have been accurate, since consolidation was often used as a way to lock in a low interest rate on variable-rate loans, says financial aid expert Mark Kantrowitz.But that doesn’t mean consolidation is always a smart move.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.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.Be wary of consolidating if you’ve already made progress toward loan forgiveness under the 10-year period for public sector employees or the 20-year period under income-driven plans.Consolidating starts that clock over, so if you’ve been in an income-based repayment plan for five years and plan to stay in that plan until you hit forgiveness in another two decades, it’s not generally worth it to consolidate. Federal consolidation and private refinancing are very different.

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You’ll pay fixed, monthly installments to the lender for a set time period, typically two to five years.Other options for borrowers with bad credit include secured or co-sign personal loans.Some lenders say they have no minimum credit score requirements, but that does not mean they don’t check your credit report.Borrowers with excellent credit and low debt-to-income ratios may qualify for interest rates at the low end of lenders’ ranges.Someone with poor or average credit may be able to get an unsecured personal loan on the strength of a steady income and low debt levels, but should expect rates toward the higher end of the range — up to 36%.