Federal Student Loan Consolidation
Federal Student Loan Consolidation Information
Federal Student Loan Consolidation is program that combines some or all of your multiple federal student loans into a single loan with single monthly payment of course. Federal Student Loan Consolidation is available under the Federal Family Education Loan (FFEL) program. You can get this consolidation if you have already gotten any of federal loans. You can not get the consolidation with any of private student loans.
You can get the federal student loan consolidation in part or in full. You can get it even if you got loans from different lenders at all, and of course the types of loans are different. But there are loans that can not qualify for federal student loan consolidation. They are private loans, school-based loans, and loans provided a student’s family.
The federal student loans include:
1. The Federal Perkins Loan
It has 5% fixed interest rate and nine month grace period. It is subsidized student loan which interest rate is not charged until the payment starts.
2. The Federal Stafford Loan
It is sponsored by federal government. You can also get it from private lenders. It can be the subsidized loan and the unsubsidized loan as well.
3. PLUS loans
It is designed for parents, but now graduating students can obtain it. This kind of loan lend you higher amount of loan. Your parent will be the person who is responsible for it.
Private student loans are provided by separated student loan company with high interest rate. The lenders may lend you in huge amount. The interest rate depends on Current Prime Rate and the Wall Street Journal.
The best time to take the consolidation is during your grace period. You can apply for the federal student loan consolidation under the FFEL program if you are in the grace period or the repayment period of all your loans you want to consolidate. If the grace period has finished, you will get higher charged interest rate.
If all of your federal loans you got from one lender, you can contact your lender to buy the federal student loan consolidation. If you get your loans from different lenders, you can contact one of them and question whether they provide federal student loan consolidation or not.
On time monthly payment will advantage you. Some lenders will offer repayment incentives. You can benefit from on time payment and you can get immediate interest discount for automatically scheduled debit payments.
Also read: Student Loan Refinance
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