Interest is the fee charged by the creditor to the debtor, generally calculated as a percentage of the principal sum per year known as an interest rate and generally paid periodically at intervals, such as monthly. Although there is variation from country to country and even in regions within country, consumer debt is primarily made up of home loans, credit card debt and car loans.Household debt is the consumer debt of the adults in the household plus the mortgage, if applicable.Unlike private sector debt consolidation, student loan consolidation does not incur any fees for the borrower; private companies make money on student loan consolidation by reaping subsidies from the federal government.
The overall lower interest rate is an advantage of the debt consolidation loan offers consumers.
Lenders have fixed costs to process payments and repayment can spread out over a larger period.
Maybe you have student loans with multiple servicers and different credit card balances.
Or, you have multiple auto loans and mortgage payments.
Depending on your creditworthiness, refinancing federal or private student loans with a private lender may lower your interest rates.