Pros cons consolidating federal loans
This can be very helpful for people who want one bill a month.
However, there are pros and cons to student loan debt consolidation that each person should consider.
Loan consolidation can also give you access to additional loan repayment plans and There is no application fee to consolidate your federal education loans into a Direct Consolidation Loan. Department of Education (ED) or ED’s consolidation loan servicers. Top A Direct Consolidation Loan has a fixed interest rate for the life of the loan.
You may be contacted by private companies that offer to help you apply for a Direct Consolidation Loan, for a fee. There’s no need to pay anyone for assistance in getting a Direct Consolidation Loan. The fixed rate is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest one-eighth of one percent.
If you select this option, you won’t have to begin making payments on your new Direct Consolidation Loan until closer to the end of the grace period on your current loans.
Top Borrowers have different needs, so there are several repayment plans—including income-driven repayment plans, which base your monthly payment amount on your income and family size.
You can complete and submit the application online, or you can download and print a paper application from Student for submission by U. The consolidation servicer will be your point of contact for any questions you may have related to your consolidation application.
Once loans are consolidated, there is no going back. Future loans can be added to the bill of the other loans.
It is important to remember that a consolidated loan is affordable because it is spread out over 10 to 30 years instead of the traditional 10 years.
Unless the loans you want to consolidate are in a deferment, forbearance, or grace period, it’s important for you to continue making payments on those loans until your consolidation servicer tells you that they have been paid off by your new Direct Consolidation Loan.
top This depends on where you are in the consolidation process.