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Don’t wait until it is too late… you can obtain a Federal Consolidation Loan today…

Federal student loan consolidation allows you to combine one or more individual federal loans into one, new student loan. This has the benefit of simplifying your paperwork as you are making one loan payment instead of several and may also bring additional benefits such as, in the federal consolidation program, the borrower can stretch repayment out from the standard 10 year repayment period to up to 30 years, depending on the total amount being consolidated.

This will usually result in a lower monthly repayment, however may increase the overall cost of the loan.

The benefits of any Federal Loan Consolidation will depend on several factors, including the types and amounts of student loans to be considered, the repayment status on the loans, in-school, in grace period, in deferment etc and the financial situation of the borrower.

For the majority of borrowers, the main benefit of consolidation is combining several student loans into a single loan with one monthly payment, the second benefit is that consolidating student loans often takes loans that were subject to variable rates and issues a new loan based on a fixed rate that will not increase over time. In the majority of cases, a consolidation loan allows borrowers to extend their repayment term beyond the original term of their existing loans, which results in a lower monthly repayment.

In some cases based on the total loan amount borrowers can take loans with a 10 year repayment term and extend them up to 30 years, lowering monthly payments by more than 50% in some cases. However keep in mind that when ever you extend your repayments, you are also extending the time period on which interest is charged and therefore the total cost of the loan will usually be higher in the end of the loan term.

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The difference between federal consolidation and private consolidation loans are that federal consolidation loans are a mechanism to refinance only federal student loans and private consolidation loans are a way to refinance private student loans.

The major difference is that a federal consolidation loan comes with a fixed interest rate that follows a set federal formulas, whilst private consolidation loans come with a market rate that may be fixed or variable.

If a borrower wants to consolidate federal and private loans, they should make sure to keep them separate, as refinancing a federal loan with a private consolidation loan would most likely result in a much higher interest charge than had you kept it separate.

Eligible Borrowers for a Federal Consolidation Loan

The criteria for a borrower to be eligible to consolidate their federal student loans may vary from lender to lender so you will need to check with them for more specific information, however these are some general eligibility requirements, the borrower needs to;

Have at least one outstanding qualifying federal loan.
Have a total of outstanding federal education loan balances of $7,500 or greater, this may vary from lender to lender as some lenders will consolidate lesser amounts.
Have no existing student loans in default.
A U.S. citizen.
No longer, or soon to be no longer enrolled in the program for which you borrowed the loans you want to consolidate.

Eligible Federal Education Student Loans

The following list of federal education student loans are eligible for consolidation into a Federal Consolidation Loan:

Subsidized Federal Stafford Loans (SS)
Unsubsidized Federal Stafford Loans (US)
Federal Parent Loans for Undergraduate Students (PLUS)
Federal Supplemental Loans for Students (SLS)
Federal Perkins Loans (PERK)
Nursing Student Loans (NSL)
Health Education Assistance Loans (HEAL)
Auxiliary Loans to Assist Students (ALAS)
Health Professions Student Loans (HPSL)
Federal Insured Student Loans (FISL)
Guaranteed Student Loans (GSL)
Federal Unsubsidized Consolidation Loans (UCON)
Federal Subsidized Consolidation Loans (SCON)
Federal Direct Subsidized Student Loans (DSS)
Federal Direct Unsubsidized Student Loans (DUS)
Federal Direct Consolidation Loans (DCON)
Federal Direct Parent Loans for Undergraduate Students (DPLUS)

Don’t wait until it is too late… consolidate your eligible student loans into one Federal Consolidation Loan

Benefits of Federal Loan Consolidation

A Federal Consolidation Loan lets you combine one or more of your Federal Education Loans into a New Education Loan that provides you with the following advantages.

Lower Interest Rate for Auto-Debit and On-Time Payment

You may recieve up to a further 0.25% reduction should you enroll in an automatic checking account withdrawal and may also qualify for up to an additional 1.0% reduction.

One Lender and One Monthly Payment

With only the one lender and the one monthly payment, you will find it is easier to manage your student debt, you will have only one lender with a single monthly payment.

Flexible Repayment Options

You can select from different plans to repay your Federal Consolidation Loan, these plans can be flexible to meet the different needs of borrowers.

Grace Period

If you consolidate whilst in-school you may receive a 6-month grace period before repayments begin.

No Fees

There are no fees associated when you consolidate your federal student loans.

Varied Deferment Options

Federal Consolidation Loans may offer several deferment options, if you have exhausted the deferment options on your current Federal education loans, a Federal Consolidation Loan could renew those deferment options.

Reduced Monthly Payments

A Federal Consolidation Loan may lower your monthly payment, the minimum monthly payment on a Federal Consolidation Loan may be lower than the payments on your federal education loans.

Retention of Subsidy Benefits

You will keep any subsidies on your old loans.

Information Source - The US Department of Education.

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The team at My Student Loan Consolidation Information hopes that you find the Student Loan Consolidation Information and articles on this site useful, and that they help you with implementing your Student Loan Consolidation Program for more information please visit our home page Student Loan Consolidation Info or our Site Map.

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