Federal Student Loan Consolidation A Consolidation Loan allows you to combine your federal student loans (whether through the FFEL or Direct program) into a single loan. While we cannot advise students about loan consolidation, we do suggest that loan consolidation has advantages and disadvantages specific to each student’s specific circumstance. Your ability to manage debt load, the amount of your debt load, and your likelihood for future income are a few factors to consider. Consolidation is very similar to refinancing a mortgage. Private education loans cannot be consolidated with federal student loans. Some lenders offer private consolidation loans. What does a Federal Consolidation Loan do for me? Fixed interest rate: If you consolidate your loans through Direct Loan, you may lock in a low interest rate (based on the weighted average of the interest rates of the loans you consolidate). One payment: One convenient monthly payment. Extend the repayment period: If your monthly payment is too high and you can’t afford to pay your student loans back in 10 – 15 years, you can consider repayment for up to 30 years, depending on your loan indebtedness. (Remember the longer you take to pay off your loan, the more interest you pay.) Want to see what your monthly payment would be? Click on this link and fill in your total subsidized loan amounts plus any unsubsidized loan amounts. It will calculate your monthly payment. How do I apply for a Federal Direct Consolidation loan? Apply online or call 800-557-7392.
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