If you have federal loans, you can lower your monthly payments and reduce your interest rates, and make some savings with the Federal Consolidation Loan program.
What Are The Benefits Of Consolidating Your Student Loan?
Federal Student Loans enable you to consolidate your different types of student loans you acquired into one loan which is easy to maintain. With a Federal student loan consolidation, you can get interest rates that are fixed for the whole duration of your loan.
What Would Be The Disadvantages Of Acquiring A Consolidated Student Loan?
This depends on how you manage your loan. If you prolong the time it takes you to pay your loan, then you will end up paying more during the course of your whole loan repayment.
One Loan Can Help You Pay Your Balance Off Faster
On the other hand, with a consolidated loan there are really no penalties in prepayment and if you continually pay the same amount of payments before actually consolidating your loans, the interest you will incur would not increase. This therefore means that you will be in a position to pay the student loan off faster than in a situation where you did not consolidate your loans.
Options Available For Consolidating Student Loans
FFEL consolidation loan is one option that is available if you are considering a consolidated federal student loan. With this loan program, you can borrow via multiple repayment schedules.
Through the FFEL loan consolidation program, you make only one payment each month. In the FFEL program, the student loan consolidation you will be acquiring will be made by a commercial lender, after which credit bureaus will tell you that you already have a zero balance in your account, after doing so you will then sign a fresh promissory note indicating that you will have a new interest rate and schedule of repayment. However, in order to avail of the FFEL student loan consolidation, you must currently be in repayment on the loan you defaulted or that you have been able to make at least three voluntary and on time full monthly payments.
Refinancing student loans is subject to the borrowers financial situation. The United States Department of Education does not in any way allow any borrower to refinance a student loan consolidation. If a borrower has an additional federal loan that is not originally included in the loan consolidation, these debts may then be added and calculated again into another Federal Consolidation Loan.
When one avails of student loan consolidation, there are no fees or charges incurred. The United States Department of Education does not in any way make charges or collects any fees to any borrower who avails of the student loan consolidation.
Here is a list of the 8 student loans that are eligible to be consolidated under student federal student loan consolidation are as follows:
1. PERK - Federal Perkins Loans, formerly Nations Defense/National Direct Student Loans (NDSL)
2. PLUS - Federal PLUS (Parent) Loans
3. SCON - Subsidized Federal Consolidation Loans
4. UCON- Unsubsidized Federal Consolidation Loans
5. SLS - Federal Supplemental Loans for Students (formerly Auxiliary Loans to Assist Students (ALAS) and Student PLUS Loans)
6. SS - Subsidized Federal Stafford Loans & Guaranteed Student Loans (GSL)
7. DSS - Direct Subsidized Stafford Loans, DUS - Direct Unsubsidized Stafford Loans
8. DPLUS - Direct PLUS Loans, DUCON - Direct Unsubsidized Consolidation Loan, including Direct PLUS Consolidation Loans.
There are several advantages which one can get from student loan consolidation. Due to the fact that student loan consolidation is a federal program, a borrower is still entitled to avail of the same Federal benefits, namely deferment, tax-deductible interest and forbearance. In addition, the loan is guaranteed by the government.
Consolidating your student loan basically gives you several advantages, and can help you save some money.
Dean Shainin is a consultant specializing in student loan consolidation. Get valuable resources, tools, information and more articles on student loan consolidation, visit this site: http://www.studentloanconsolidationtips.com
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