Five Easy Steps to Consolidate your Federal Student Loans

If you are considering Federal Student Loan Consolidation your first step is to consider whether or not your student loans can be consolidated into a federal loan. Private loans do not allow for consolidation of federal loans, nor may a federal student consolidation loan include a combination of federal and private education loans. Once you have determined your loans can be combined, be sure you meet the basic requirements.

• You have not defaulted on a loan
• You have not previously consolidated these particular loans
• You are in the grace period of your loans or have entered into the repayment schedule of the loans

When you consolidate your student loans with a Federal Student Loan Consolidation program, the U.S. Department of Education will pay off your original Federal education loans, combining the total amount owed on those loans into one consolidated loan. This is done with five easy steps:

1. Once you have decided on a lender, you will fill out an application and it will go into an application review process.

2. The lender will request verification of the information on your application to determine each loan’s eligibility. In other words, to see if the loans can be consolidated and paid.

3. The loan statement, terms, and conditions will be drawn up. Before you even apply for a consolidated loan, know your own specific circumstances. What can you afford in monthly payments, what type of repayment schedule, etc. This is where these stipulations are determined.

4. After the loan is verified, payments are made to the previous loan lenders.

5. Finally, an account is sent up with the lending institution. You will receive important information about your loan, status, and payment due dates. Usually your first payment is due within 30-60 days of loan consolidation.

Consolidating student loans is easy, once you understand your options by taking the correct steps. Determine if your loans qualify. Establish a budget, what your personal finances allow you to afford in the way of a loan payment. There are dozens of student loan calculators on the web which will help you compare your current student loans interest rates and payments with those of a federal consolidated student loan. Next compare financial lending institutions. Some offer incentives that others do not. Federal Student Loan Consolidation does not have to be a daunting task if you do your homework.

Manage Your Debt by Consolidating Federal Student Loans

Consolidating student loans is a great way to manage debt and lower your monthly payments, but the options should be carefully considered to avoid being faced with a monthly loan payment that the student cannot afford. It also helps because when you have several different payments that are due at various times of the month it is difficult to remember to make each of the payments on time. Consolidating student loans can be confusing because federal loans are handled differently than private loans and they cannot be consolidated together.

Federal Loan Consolidation

All federal student loans can be consolidated into a single monthly payment, but the interest rate will remain the same, so the major benefit is that you will only have to make one payment each month. Consolidating student loans from the federal government will not change the amount of money that you pay each month, but it may make you eligible for a payment plan that your current loans don’t qualify for. As of July, 2009, students who have taken out federal student loans may be eligible for a payment plan based on their current income. This plan allows students who have taken low paying jobs to pay smaller payments each month based on a percentage of their total income and how it relates to the federal poverty level for their family size. The remaining balance of their federal student loan will be forgiven after twenty five years.