If you have a few education federal student loans, debt consolidation is one way to simplify the process of fixed settlement. In a new window, a direct consolidation loan opens up which combines multiple education federal student loans into one loan, resulting through one monthly payment average.
This can be a great way to be on top of education student loan payments, as well as setting up yourself for future loan forgiveness depending on some conditions of various types of loans and income-driven settlement plans.
Consolidation of student loans will minimize your monthly payment by extending your fixed repayment schedule; however, you definitely end up paying more because of the additional interest you pay when increasing your loan term.
Deciding whether consolidation is right for you depends on whether your desire to simplify fixed payments mitigates the potential loss of some benefits. The initial thing to consider is whether you already have multiple federal student loans for different services, which means that you need to sign in at least two or more different accounts to pay your education student loan bills on a monthly fee.
Student Loan Services are businesses, such as big lakes or fed loan services that collect payments on your loans and keep your records. In this example, restructuring will make life a little simpler, because the method is going to give you a loan program with a bill every month. Consolidation can also lower the monthly payments fixed interest rate as a direct consolidation loan has a Reimbursement period from the normal period of 10 years to 30 years which opens in a new window.
Almost all of the federal student loan is eligible to be consolidated. If you have private educational loans, you won’t be able to consolidate them with federal loans. You can’t consolidate your loans while you’re still in school and must complete, go out of school or drop under half-time to pursue consolidation. Parent plus loans can not be consolidated in the name of the student with loans.
The Direct Loan Consolidation Application Process is available through the student loans.gov opens a new window. You can simply fill out an online application or, if necessary, print and mail the paper version. To make things easier, it can help you gather all your loan documents, accounts, and bills on hand while you’re going through the process.
You can also choose which loans you make and do not want to combine on your application for a loan. For example, you’ve got a loan that is going to be paid off in a short period of time, you may think about leaving it out of consolidation, or if you have made a qualifying amount settlement for some of the loans already.
There may be other reasons why you do not want to add a certain loan in your direct consolidation loan— consider the characteristics of each particular loan before determining whether to consolidate with a fixed interest rate. For example, if you take one or more loans out of the direct consolidation loan, you will end up with about the amount of settlement fee schedules and monthly student interest payments.
Don’t forget to not stop paying your loans during the time of application until you are informed that your new direct consolidation loan has been paid off. Your first new settlement is due within two months of the first installment of your direct consolidation loan. You can apply for a direct consolidation loan through this studentloans.gov site. You can fill out and apply online, or you can download and print a paper application from studentloans.gov for submission to us. Post. Mail.
Once you have submitted your application form electronically to the student loan’s official website, or by via mail, the consolidation office you have chosen will do all that is needed to merge your qualifying loans. The consolidation service will be your contact point for any concerns you may have relevant to your consolidation request.
But in cases where the loan you want to combine are in a grace period, deferment, or forbearance, you need to continue making settlements on those loans until your consolidation service provider tells you that your new direct consolidation loan has been paid off.