Student Loan Consolidation

Student Loan Consolidation



Student Loan Consolidation
A federal student loan consolidation program is​ a​ federally regulated loan that allows you​ to​ combine all of​ the​ existing federal loans you​ received for your education into one new single loan. When you​ do a​ student loan consolidation,​ the​ new lender will arrange to​ have all your existing loans fully paid off and issue you​ one new loan. Generally there are no application fees or​ credit checks required for consolidation loans and by consolidating your loans you​ can benefit in​ the​ following ways
• Lower monthly payments. By consolidating your federal student loans,​ you​ can take advantage of​ lowering your monthly payments which will give you​ more money to​ use for other expenses such as​ rent or​ mortgage payments,​ food and car expenses,​ utility expenses,​ and credit card payments. Depending on​ your balances,​ you​ might be able to​ reduce your monthly payments up to​ 45%.
• One payment per month. if​ you​ currently have loans with multiple lenders,​ you​ know the​ hassle of​ having to​ write several checks per month,​ each for a​ different amount and to​ a​ different lender. By consolidating,​ you​ eliminate the​ need to​ make multiple monthly payments. you​ will only have to​ write one check or​ make one payment each month!
• Lock in​ a​ low fixed interest rate. Currently,​ unconsolidated federal student loans have a​ variable interest rate which changes each year. By consolidating,​ you​ can lock in​ a​ fixed interest rate which remains constant through the​ life of​ the​ loan.
• Customize a​ Payment Plan. By consolidating your student loans,​ you​ have the​ opportunity choose a​ payment plan and payment term that fits best with your current income. in​ some cases you​ can take up to​ 30 years to​ repay and you​ can change the​ plan annually without any penalties. in​ addition,​ if​ you​ decide you​ would like to​ repay your loans early,​ there are no prepayment penalties.
• Maintain your deferment and interest subsidy benefits. By consolidating your loans,​ you​ do not give up your deferment options or​ interest subsidy benefits on​ any subsidized FFELP or​ subsidized Direct loans that you​ consolidate.
When Should I ​ Consolidate
You can do a​ student loan consolidation during your grace period or​ during repayment. you​ might even get to​ do a​ consolidation before you​ graduate. the​ timing depends on​ a​ variety of​ factors.
• Consolidating during the​ grace period may get you​ a​ lower rate
• you​ don’t want to​ consolidate too soon after graduation. if​ you​ do,​ you​ might lose out on​ some interest subsidies
• if​ you​ think interest rates are low,​ you​ might lock in​ the​ rate
• if​ you​ want a​ lower monthly payment today,​ you​ might try to​ get an extended repayment plan
Federal Loans Eligible for Student Loan Consolidation
Many federal student loans already have a​ low interest rate. However,​ you​ may be able to​ achieve a​ lower payment by consolidating these student loans. Here is​ a​ list of​ federal loans that are normally eligible for student loan consolidation
•Federal Stafford Loans
•Federal Direct Loans
•Federal Perkins Loans
•Federal Supplemental Loans for Students SLS
•Federally Insured Student Loans FISL
•National Direct Student Loans NDSL
•Federal Parent Loans for Undergraduate Students PLUS
•Loans for Disadvantaged Students LDS
•Auxiliary Loan to​ Assist Students ALAS
•Health Education Assistance Loan HEAL
Student loan consolidation could benefit you,​ but evaluate the​ amount and types of​ student loans that you​ are carrying,​ and then see if​ you​ can consolidate and cut your payments and debts.




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