Subscribe

Should You Consolidate Student Loans?

College GraduatesIn order to make it through the years of school, students take on a lot of debt from various loans. Sometimes, these loans come from private lenders with higher interest rates and fewer protection. Most loans, however, are funded through the Federal Government. These loans come with several protections and repayment plans. If these loans are through private lenders, they may become difficult to keep track of unless you consolidate them. In many cases, a Direct Consolidation Loan may help you to lower your monthly payments, give you a longer time to repay the loan, or even give you access to income-driven repayment options. Here is what you need to know about consolidating your student loans.

           

What is a Direct Consolidation Loan?

A Direct Consolidation Loan combines several existing loans into one, resulting in one monthly payment instead of several payments each month. It may be used to consolidate Federal loans, but private ones may be considered in determining monthly payment options. It may also give you access to new types of repayment plans.

 

What types of loans may be consolidated?

            Nearly all Federal loans may be considered for consolidation, including:

  • Subsidized Federal Stafford Loans
  • Unsubsidized Federal Stafford Loans
  • PLUS loans from the Federal Family Education Loan (FFEL) Program
  • Supplemental Loans for Students
  • Federal Perkins Loans
  • Nursing Student Loans
  • Nurse Faculty Loans
  • Health Education Assistance Loans
  • Health Professions Student Loans
  • Loans for Disadvantaged Students
  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
  • Direct PLUS Loans
  • FFEL Consolidation Loans and Direct Consolidation Loans (only under certain conditions)

 

Should I Consolidate my Loans?

If you have loans with different servicers, then consolidation will ensure one monthly payment instead of several. A Direct Consolidation Loan will reduce your monthly payments by giving you longer to repay your loan. You may extend your repayment time up to thirty years. It may also give you access to income-driven repayment options and the Public Service Loan Forgiveness Program. You may also be able to fix any variable interest rate loans to a fixed interest rate. The interest rate on a Federal Direct Consolidation Loan is fixed.

On the reverse side, a Direct Consolidation Loan may not be right if you do not wish to increase the amount of overall interest you will pay. Because the time to repay will be longer, you will pay more overall interest. You will also lose some borrower benefits such as interest rate discounts, principal rebates, or some loan cancellation benefits. If you are already on track with the Public Service Loan Forgiveness program, you will lose credit for any payments you have already made towards the program.

 

What are the Requirements to Consolidate a Loan?

In order to qualify for a Direct Consolidation Loan, you must consolidate at least one Direct Loan or FFEL Program loan. The loan must be in the repayment or grace period, which means that you must have dropped below half time enrollment or have graduated. You may not consolidate an existing consolidation loan unless you are including an additional eligible loan. If a loan is in default, you must make at least three monthly payments before it may be considered for consolidation.

 

Are There Multiple Repayment Options?

No borrower lives in the exact same economic circumstances as another, so repayment options vary. There are multiple plans, including those with fixed payments and income-driven payments. Each one comes with pros and cons. Income-driven plans may be better for those with less employment security. Fixed payment plans generally pay off the loan much more quickly.

How Do I Apply?

The best way to apply is to visit StudentLoans.gov. You may fill out an application online or print and mail in the paperwork. You will need a FAFSA ID in order to login so that you may select a servicer who will contact you and walk you through the process. Continue making payments on your loans before the process is completed to avoid default and ensure a smooth process. After approval, you will have 60 days before the first payment is due.

Student loans can be tricky. For most people entering adulthood, they are difficult to understand. Direct Consolidation Loans are one method to simplify a complex, but important, process. For more information, visit the Department of Education’s information page for Direct Consolidation Loans. Consolidation of your loans may be a great way to ensure that student loans do not damage your credit or your financial future.

 

Ways to Face Fears | Succeed
All of us have a hard time with failure, and it can often lead us to feeling insecure about ourselves. It can even begin to compound our fears and leave us feeling nervous and anxious in unfamiliar situations. We want to be able to predict and control everything that...
A VA Home Loan Can Help You Get Affordable Housing
 Ever since the housing market collapse, lenders have tightened the requirements to qualify for loans. If you don't have the required credit score or enough for a 20 percent down payment, it will be difficult to secure qualification for a conventional...
Searching for Online and Freelance Employment
Searching for Online & Freelance Employment Many career fields and skills do not fall under traditional frameworks for employment. Writers, photographers, marketers, teachers and artists may be able to find work as online freelancers to continue improving their...
HARP Eligibility and Assistance
 If your mortgage is making your financial life more difficult than you expected, you can get assistance through a program called HARP (Home Affordable Refinance Program). HARP eligibility is easy to determine as there are several factors that can affect...
Find The Best Section 8 Homes & Rentals
Find The Best Section 8 Homes & Rentals Are you feeling a little frustrated searching for Section 8 homes and rental property? Below is a list of multiple Section 8 housing resources. These are not in any particular order. These are just eight very good resources...
The Most Common Reasons for Debt
 High debt balances can create significant stress, negatively impact not only your future, but it can also impact your health. It can prevent you from enjoying the quality of life that you otherwise may enjoy without the burden of debt payments. While...
Morning Habits for Success
Are you a morning person? Many people enjoy getting up at the sunrise and having a cup of coffee while they browse the web and others prefer to sleep in as long as possible but the most successful people in the world embrace the mornings and in fact there...
The AHCA Impact on Medicare & Medicaid
The Impact on Medicare & Medicaid The repeal and replace legislation concerning the Affordable Care Act (ACA), or Obamacare, seems complicated for many consumers. Though it will likely see changes as it is debated in the Senate, the American Healthcare Act (AHCA)...
Natural Antibiotics and Antivirals
The issues of antibiotics and antibiotic-resistant bacteria have gotten a lot of attention lately. The concern is that bacteria, having been exposed to antibiotics for so long, have developed a resistance to the antibiotics, creating "superbugs." The grim reality is...
Government Grants Exposed
You and I have heard it all before, the man with the funny jacket on late night TV telling us that the United States government gives out over 30 Billion dollars in grants every year. And if we want any of that for ourselves, all we have to do is send him...
Free Cell Phones: Avoid The Trap
Cell phones are becoming very sophisticated with the advancement in the technology. Today the cell phones come with lot of mind-boggling kinds of features on them. Due to the increasing competition between the handset manufacturers and the service providers, lots of...
Rent Assistance and Low Cost Housing
With todays economy fluctuating , many individuals and families are struggling to pay bills in a timely fashion, including their rent. The good news is that there are a variety of options available to anyone who is facing late fees, court dates or even...
Unsecured Personal Loans
Unsecured Personal Loans are those that do not have any collateral attached to them. This type of loan is often easy to get, but know in advance you will be paying a higher interest rate on the loan.This is because there is a great risk of non-payment due...
Coupon Tips That Can Save You Money
Everyone loves a great deal and your luck will get better when you find coupons for your favorite items. There are a lot of great locations to discover coupons these days, including the Internet, newspapers and flyers. These are tips and techniques on how...
The Facts You Need to Know About Payday Cash Advances
If you need money, it can feel as if there is no one to help you. It may feel like you're up a creek without a paddle. Luckily, you can get payday cash advances to help you out. Research all companies that you are considering. Find a lender that fits you...
Social Security Benefits & Retirement
Though all Americans look forward to the day when they can kick back in a lawn chair and spend time working in their flower gardens, retirement comes with many burdens. A fixed income or access to a 401(k) may not be enough to supplement the lifestyle many seniors are...
How The New Budget will Impact SNAP
How The New Budget will Impact SNAP  The Supplemental Nutrition Assistance Program (SNAP) assists lower-income families to purchase food in order to prevent hunger. The program also provides economic benefits to communities. The proposed budget for 2018...
How to Save Money on Your Kids Dental Bills
Your family budget might not extend as far as it used to. Still, you want your children to have healthy teeth and inexpensive kids dental bills. Learn how to save money on your kids dental.  Like Clean Teeth? Try the Dollar Brush!   Courtesy of Fox News Health...
Penny Pinching Groceries Plus Earning While Shopping
Penny Pinching your way into savings and earning! If you feel like you are wasting money on groceries then you're not alone. The average American spends around $160 per week at the supermarket. What if I told you that number can be easily cut in half by penny pinching...
Solid Advice for Credit Repair
It may be difficult to find information on the best ways to improve your credit. There is a wealth of different tips in this article to help you rebuild your journey to credit repair. Using these tips can save you from stressing and prevent headaches....
Family Picnic

Enter Your Email for Best Results

Due to the overwhelming response, please enter your name and email to ensure the proper search results.

You Are On Your Way!

Family Picnic

Enter Your Email to Receive New Assistance Updates

Due to the overwhelming response, please enter your name and email to ensure proper results.

Thank You! You will now receive the latest assistance updates!

Family Picnic

Enter Your Email for Best Results

Due to the overwhelming response, please enter your name and email to ensure the proper search results.

You Are On Your Way!

Pin It on Pinterest

Share This