If you have several Federal student loans outstanding, you’re probably burdened with not only high loan balances but also several different payment schedules, various interest rates and all the associated paperwork. Consolidation enables you to simplify and save.
Definition of Student Loan Consolidation
A student loan consolidation loan, also known as school loan consolidation, is a refinancing program where you the borrower transform all your student loans into one loan with a fixed rate, one monthly loan payment and one lender!
How Does Consolidation Work?
Consolidation gives you the opportunity to reduce the size of your monthly payment by extending the standard 10-year repayment plan to 15 to 30 years. When combined with low Federally-mandated interest rates, student loan consolidation enables you to pay less per month, improving your cash flow.
Extending the loan for that length of time may actually increase your overall repayment amount over time. However, depending upon the determined fixed interest rate, the amount of loan balances outstanding and the monthly amount you choose to pay, your actual student loan repayment costs may be reduced with consolidation!
What’s the Application Process?
- Identify all your outstanding loans.
Information is power. The first step is to get all the information on your outstanding loans.
- Make a Loan Consolidation application.
Apply in minutes by calling or emailing the company of your choice.
- Sit back while they contact your loan holders and start the application process.
A client representative will obtain verification of your loans and initiate the consolidation process.
- Track your application progress anytime.
What’s the Interest Rate?
The fixed interest rate on a Federal Consolidation Loan is the weighted average of the interest rates on all of your student loans being consolidated, rounded up to the nearest 1/8 of a percentage point or 8.25%, whichever is less.
How Much Can I Save?
You can reduce your monthly payments by almost 50% when you consolidate your loans into a single loan.
When Should I Consolidate?
Consolidation should be done once you have graduated, although you are able to apply while you are still in school.