Federal student loan consolidation can be obtained for Stafford, Plus, Perkins, Heal, NSL, HPSL and all the Direct Loans. You can only consolidate the loans which are not in default, so you must first take care of the defaulted loan to be able to put it into the consolidation.
There are really no disadvantages to consolidating student education loans. The one disadvantage that we are aware of is due to the Federal Perkins Loan. Perkins loans are typically subsidized by the us government while in deferment while the student is still in-school. Whenever you consolidate a Perkins loan it loses that subsidization.
The benefits of consolidating a loan are only one monthly payment, usually fixed rate which is advantageous if rates tend to be low and loan terms up to 30 years with respect to the balance. This can lead to lower monthly payments general. If you have a Stafford loan, you should consider consolidating on your grace period as the loan repayment is. 6% less than it is in repayment.
The Stafford loan has these types of repayment options:
Standard repayment is where the principal and interest payments are due every month throughout the repayment period.
Graduated repayments are smaller at the start of repayment process and increase at specific periods and in specific amounts within the term of the loan.
Income-based repayment takes monthly loan payments depending on a percentage of the borrower's monthly gross income. StaffordLoan. com provides an income-sensitive repayment plan.
Extended Repayment provides eligible Federal Stafford, Federal PLUS and Alternative loan/Federal Consolidation loan borrowers payment relief through a lengthened repayment term as high as 25 years.
Serialization is when the loan holder purchases your loans held by other institutions and services them in a single account. You make one monthly payment but retain the initial terms and interest rate.
With the student loan payment programs, the consolidation program should be seriously considered. The borrower may refinance multiple loans and original loan amounts are paid entirely and a new loan for the combined balance is actually originated, with a new loan term and usually a brand new interest rate.
Student Loan Consolidation can lower your prices by 60% whether your loans are federal loans, personal loans, parent PLUS loans, or Stafford loans. It is important to make the most of federal financial aid before turning to alternative financing options for example private loans. Refinancing your student loans will reduce your monthly obligations and lock in a fixed interest rate. When you consolidate student education loans you are refinancing your existing student loans and rolling them into a single manageable loan.
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