Consolidate government loan student
If you have taken student loans from different lenders and find it difficult in managing them and making regular monthly payments to each of the creditors, you may go for loan consolidation. By consolidating your individual loans into one single loan allows you to do only a single monthly payment instead of the several ones that you had been making otherwise.
The student loan consolidation program sponsored by the U.S. government, known as direct consolidation loan, is a good option to go for when you have government loans with different interest rates. With Direct consolidation loans, the interest rates will be the same for the whole life period of the loan and it will be calculated on the basis of average interest rate of the individual loans that are to be consolidate d.
Benefits of government student loans consolidation:
Apart from the above mentioned benefit that consolidation of your government student loans goes a long way in helping you manage your debts better and easier, there are also other advantages with the government student loan consolidation.
You don't have to deal with the individual creditors anymore as you will have to make payment to only one lender namely the U.S. Department of education.
When you choose Direct consolidation loan, you will have different plans of repayment to choose from as per to your liking. You will also be free to change your repayment plan whenever you wish to do so.
As the rate of interest on a consolidate d government loan will generally be lower than that of the individual loans, your monthly payment amount will be lesser that the amount you would've paid before consolidating your loans.
student loans that can be consolidated:
The following types of loans can be consolidate d under Direct consolidation loan program.
1. Direct subsidized and unsubsidized loans
2. Federal Stafford loans
3. Federal Perkins loans
4. National Defense student loans
5. loans for disadvantaged student s
6. nursing student loans
7. Health professions student loans
8. Direct PLUS loans Federal Consolidation loans
9. Guaranteed student loans
10. Auxiliary loans to assist student s
Note: loans such as private loans, loans issued by state government s and medical loans, though are not eligible for student loan consolidation, may be considered while determining the maximum period for the Graduated or extended repayment plan.
Repayment plans:
There are different plans for repayment to choose from, for repaying your Direct consolidation loan, which are designed to suit different interests and situations.
1. consolidate d Standard Repayment Plan: According to this plan, you will have to pay regular monthly payments of $50 or above and will have to repay the whole consolidate d student loan in a period of 10 to 30 years, depending on the amount you owe.
2. consolidate d Graduated Repayment Plan: Under this plan, your monthly payments will be the least initially and will increase after every two years, with your minimum payment will be equal to your monthly interest. The consolidate d student loan will have to be repaid in full in 10 -30 years period.
3. Extended Fixed Repayment Plan: If you choose this plan, your minimum monthly payment will be $50 which will be fixed throughout the repayment period. The loan will have to be repaid completely within 25 years.
4. Extended Graduated Repayment plan: According to this plan, the minimum monthly payment will at least be $50, or an amount equal to the monthly interest which will increase after every two years. To be eligible to choose this plan, your total loan amount should be at least $30,000.
Other Articles
