Student loan consolidation means that you are rolling all your multiple loans into one that you can easily manage with lower monthly rate and paid to a single lender.
Is consolidation right for you?
This repayment option extends the life of your loan repayment period to trim down your monthly dues. If interest rates are currently low, this is your chance of locking down a low interest rate for the rest of your repayment period.
When does student loan consolidation become a bad idea?
• When you have paid off a large chunk of your total debts already.
• When consolidating your student loans will result to losing your borrower’s benefits.
• When paying off your multiple loans per month is actually affordable for you.
Where do you go to have your loans consolidated?
Any private lending institution with government approval can help you as well as the Department of Education itself.
Make a research about different consolidators because there are some that offer more favorable rate reductions that are better suited to your financial situation. Remember that there are no fees involved when applying for debt consolidation.
How do you apply for a consolidation loan?
Lending institutions, federal or private, have accessible application forms online. If you have Direct loans, you have to apply via the phone. You have to know details like the kinds of loans you have, how much you owe each lender, your remaining balance, the lenders’ names, your school’s name, your current employer, your SS number, etc.
If your student loan consolidation application is approved than you will be assigned a new repayment schedule, monthly payment amount, new interest rate and new repayment term.