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Why Consolidate Your Student Loans?After graduating from school, it's conceivable that you could have a half dozen or more separate loans, all with different interest rates and payment schedules. A student consolidation loan could be worth it just to simplify your repayment schedules. Also, if you are having difficulty meeting your current loan payments, then by consolidating your student loans, you may be able to bring down the monthly payments to a manageable level. But more importantly, if you can get a loan with a lower interest rate than you are paying on your school loans, then you can save yourself some money. If the consolidation loan extends the length of your student loan payback term, then it may have the added benefit of lowering the monthly payment now (when you aren't making a large salary). You can always make larger payments as your salary grows.
How to Consolidate Your Student LoansAfter deciding to consolidate your student loans, the next step is to figure out how to go about it. You may have several choices of lenders, and what you choose could affect the amount you ultimately pay. Choose carefully.The Department of Education provides the Federal Direct Consolidation Loans Program. Numerous states have student consolidation loans, some for your federal loans and others for your state loans. Then there are private lenders offering consolidation loans as well. You might first check with your current loan providers to see what they have to offer. They may have a better deal for current customers.
Federal Direct Consolidation LoansFederal Direct Consolidation Loans are run by the US Department of Education and provide a means to combine multiple Federal loans into one. The loans that can be consolidated are listed below.
*PLUS loans are eligible for in-school consolidation only if the parent borrower also includes other eligible, non-PLUS loans in an in-school period. You can apply online for the Federal Direct Program by visiting the FDCL website
State Student Consolidation LoansSeveral states offer consolidation loans as part of their education loan programs. Among these states are Alaska, Arkansas, Colorado, Georgia , Kentucky, Maine, Massachusetts, Mississippi, Missouri,New Hampshire and North Carolina. Check with your state to see if they have a loan consolidation program.Private Student Consolidation LoansIf you can't qualify for the federal and state student loan consolidation programs because you have private loans, there are many lenders who make private consolidation loans available to students. Check with your own lenders to see if they have a consolidation program. Here are a few private consolidators.
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Student Loan Consolidation