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Student Loan Consolidation Information
The student loan consolidation information below will help you understand student loan consolidation and how you can consolidate all your student loans into a single loan.
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What is Student Loan Consolidation ?
Student loan consolidation is a service that enables you to combine all your student loans into a single loan. The biggest advantage of student loan consolidation is reduction in the monthly payments by about 50%. This is accomplished by increasing the duration of the education loan.
The logic behind student loan consolidation is plain and simple. Loan consolidation combines all your loans into one single loan. It reduces your monthly loan repayment. For example, if you have to pay $1000 in 5 years, you pay $200 every year (excluding any interest), and if you have to pay the same $1000 in 10 years, you pay $100 every year. In some cases there is a possibility of reducing the monthly repayments and keeping the loan repayment duration same.
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Benefits of Student Loan Consolidation:
- Reduce your monthly payment by about 50%
- Lower rate of interest by consolidating during your grace period
- Locking in loans at a lower interest rate
- No credit checks, fees, or application charges
- You manage just one loan instead of many i.e. only one payment per month
- Improve your credit rating
- Loan period extendable to up to 30 years
One of the major benefits of direct student loan consolidation is payment relief. By combining all of your direct student loans into one consolidated loan, you can increase your repayment term to up to 30 years, depending on the amount of your education loans. With reduced monthly payment, you'll have more money at hand to meet your other expenses. If you want, you can also make overpayments and reduce your repayment duration.
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Under the Student Loan Consolidation scheme, the interest rates are fixed based on many technicalities such as the amount of loan outstanding, the interest rate currently paid, etc. This rate of interest would be fixed throughout the life of your loan. So you don’t need to worry about the interest rate fluctuations.
Below is the list of student loans that can be consolidated under the Student loan Consolidation schemes:
- Unsubsidized Federal Stafford Loans
- Federal Parent Loans for Undergraduate Students (PLUS)
- Federal Supplemental Loans for Students (SLS)
- National Direct Student Loans (NDSL)
- Health Professions Student Loans
- Federal Perkins Loans
- Subsidized Federal Stafford Loans
- All Federal Direct Student Loans (Direct Loans)
- Health Education Assistance Loans (HEAL)
- Nursing Student Loans
- Student Consolidation Loans
- Federally Insured Student Loans (FISL)
- Loan from the Department of Education
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