Paying off more than one student loan at a time is also known as loan consolidation. For some people this is great option to get those loans paid off and not have to worry about multiple bills and payments that will need to be made monthly. It is important to do your research before deciding that this is the best option for you, however if you do then below are listed some information and steps to get those multiple loans paid off at the same time.
When Can You Consolidate Your Loans?
The answer to this one is short and sweet – generally, you are eligible to consolidate after you graduate, leave school, or drop below half-time enrollment. That means, in some circumstances, you may actually be able to consolidate to one loan and begin making payments while you are still working towards graduation.
What Are The Requirements to Consolidate a Loan?
There are a few different requirements that must be met before consolidation becomes an option for you. You must have at least one Direct Loan or FFEL Program Loan that is in a grace period or already in repayment. If you are wanting to consolidate a loan that has already defaulted then you must either make satisfactory repayment arrangements on the loan with your current servicer, or you must agree to repay under one of the repayment plans that will be offered by the servicer of the consolidated loan. Also, generally, you cannot consolidate an existing consolidation loan again unless you are adding a new student loan.
What is the Interest Rate on a Consolidation Loan?
A Direct Consolidation Loan has a fixed interest rate for the life of the loan. This is likely going to vary from person to person as the rate is based on the average of the interest rates of the loans that are being consolidated. There is no cap on the interest rate of a Direct Consolidation Loan.
When Do I Begin Repayment?
Repayment of your consolidated loan can begin sixty days after the loan has been disbursed, if not sooner. The servicer of your loan will let you know when the first payment is due. The repayment term ranges from ten to thirty years, depending on the amount of your loan debt and the repayment option you choose.
Are There Different Repayment Plans?
Yes. There are several plans that are designed to meet the needs of different individual borrowers. Your servicer will have more information about your specific repayment plan options when you meet to consolidate your loan.
How Do I Apply to Consolidate?
You can apply for a Direct Consolidation Loan through www.StudentLoans.gov. Once you have submitted the application it will be turned over to the consolidation servicer who will then complete the necessary actions to consolidate your eligible loans. Your servicer will then be your point of contact for any questions or concerns you have related to your consolidated application.
If you find yourself struggling with debt or would like to find out about becoming debt free, call Debthelper at 800-920-2262, or visit @ www.debthelper.com.