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.

 

Applying and Making Phone Calls to Potential Employers
Applying and Making Phone Calls to Potential Employers Applying to Places Not Hiring: A Wise Move or Not? Are you in desperate need of a job? If you are currently unemployed or if you truly think that your current job is making you “crazy,” you may be due for a new...
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...
Best and Worst Student Loan Services
Best and Worst Student Loan Services This is the time of year when hundreds of thousands of Americans begin to prepare for their first semester in college. They begin to seek out the items that will sustain them during dorm life. Parents spend money on new sheets, hot...
4 Challenging Discussions (And How To Have Them)
It's not always easy to practice open and honest communication, especially with your family. Unfortunately, that lack of communication can have serious consequences. If you're having a hard time finding the courage to approach your family about an issue...
Inexpensive Public School Alternatives
Sending kids to the public school a few blocks away is a simple task for some families. However, not all parents wish to follow this route. They may have concerns about the safety of the public school in the neighborhood, or they may want a different type of education...
Social Security Disability Assistance
 Social Security Disability Insurance pays benefits to you and certain members of your family if worked long enough and paid Social Security taxes. Supplemental Security Income pays benefits based on financial need. If you need help and personal guidance...
Car Loans Approved Today!
Drivers will be excited to hear that the cost of a vehicle has started a downward plunge making it even easier to get the car loans you have always wanted. According to predictions by GasBuddy, the average price for a gallon of gasoline is set to fall...
Affordable Housing Problems
On 1st Street in Santa Ana — not far from where authorities recently cleared a tent encampment along the Santa Ana River near Angel Stadium — developer Caleb Roope wants to build nearly 1,000 apartments that will be affordable for low-income seniors and...
Car Shopping and Ways To Pay for It
A franchised new car dealership is a reliable, if not the only, source for anyone who wants to buy a new car.  But to those who prefer buying used or previously owned cars, there are plenty of options and sources one could choose from to be able to make...
5 Common Ways Families Overspend
If you are looking for ways to free up extra money in your family budget, you are not alone. You may be eager to use any extra money that you can find for debt reduction, savings, or other goals. While it may seem as though there is little or no extra room to scale...
Section 8 Housing | Where Do I Start?
Ok, what exactly is section 8 housing? Section 8 housing is also known as the Housing Choice Voucher Program. It is very fortunate here in the USA that housing assistance exists for low-income families, elderly, disabled and mentally challenged. The...
Best Way to Build Your Credit Rating
In today’s world, credit can be easily destroyed. If you are young and entering the adult world, you may not always understand how to maintain a great credit rating. Often, you do not qualify for a loan or credit card due to having no credit. Lapses in employment or...
Natural Healing Options for Arthritis
Arthritis comes in various forms, but it's always painful. The typical medical approach is to take some sort of pain medication (usually non-steroidal anti-inflammatory drugs, or NASDs) that might result in various side effects, such as stomach pain. Thankfully, there...
History of St Patrick’s Day
 St. Patrick’s Day is celebrated annually on March 17, the anniversary of his death in the fifth century. The Irish have observed this day as a religious holiday for over 1,000 years. On St. Patrick’s Day, which falls during the Christian season of Lent,...
Women Grants in The United States
A lot is being granted to the citizens of America in the name of grant scheme. Various categories of financial needs are being accomplished through these grants. Some of the most popular grants schemes ever are the grants for men, grants for women, grants...
Walmart Owes Money
Wal-Mart is a nationally recognized big box store offering low prices for customers who have everyday needs. The store employs more than 1.2 million people, and many of them are currently in a situation in which they could receive a big payout from the company for...
Relief Resources and Benefits Gov
 Let's begin with this. No One Is Guaranteed Government Assistance Just For Existing. That being said, Government aid can be very helpful to those enduring a financial struggle or hardship. It can also be beneficial for those looking to attain a higher...
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...
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...
Positive Thinking Can Change Your Life
Positive Thinking Can Change Your Life Enthusiasm Is Positive Energy “No pessimist ever discovered the secret of the stars, or sailed to an uncharted land, or opened a new doorway for the human spirit.” - Helen Keller Enthusiasm is the sunshine of your mind’s garden....

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 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