Re consolidating private student loans
A Direct Consolidation Loan allows you to consolidate (combine) multiple federal education loans into one loan. Similarly, if you have Federal Perkins Loans and you are employed in an occupation that would qualify you for Perkins Loan cancellation benefits, you should not include your Perkins Loans when you consolidate.The result is a single monthly payment instead of multiple payments. Leaving out your Direct Loans or Perkins Loans will preserve the benefits on those loans.Making the wrong decisions could end up costing you a lot more than necessary – sometimes thousands of dollars more. This process can only be completed once with each loan, and your new interest rate is determined by the weighted average of the loans you combine.If you recently graduated from college, you’ve probably been getting letters from student loan servicing companies asking if you’d like to consolidate your student loans. In this piece, we’ll explain what it means to consolidate student loans, compare student loan consolidation with student loan refinancing, and help you decide if consolidating your student loans is the right move for you. Here’s an example: Let’s assume you have 3 federal student loans of ,000, ,000, and ,000, respectively.Repayment of a Direct Consolidation Loan will begin within 60 days after the loan is disbursed (paid out).Your loan servicer will let you know when the first payment is due.The fixed rate is the weighted average of the interest rates on the loans being consolidated, rounded up to the nearest one-eighth of one percent.There is no cap on the interest rate of a Direct Consolidation Loan.
Here are some reasons student loan consolidation may be for you: If consolidating your loans doesn’t seem like the right fit, refinancing your student loans may be a better option.
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Let’s face it, student loans can get downright confusing.
You can complete and submit the application online, or you can download and print a paper application from Student for submission by U. The consolidation servicer will be your point of contact for any questions you may have related to your consolidation application.
Unless the loans you want to consolidate are in a deferment, forbearance, or grace period, it’s important for you to continue making payments on those loans until your consolidation servicer tells you that they have been paid off by your new Direct Consolidation Loan.