Student Loan Consolidation
When we speak of loan consolidation, bear in mind that we are discussing loan consolidation for student loans. If you wish to combine payments for other forms of consumer debt, you will need to choose another financing vehicle such as a home equity loan or a personal loan through your bank..
Loan consolidation enables you to combine all of your student loans into one loan. Essentially, your current student loans are paid off and a new loan is originated with the combined balance. Consolidating your student loans has several advantanges:
- Fixed interest rate
- Extended and income sensitive repayment plans
- Lower monthly payments based on extended repayment and low fixed interest
- One check to write
- One lender to work with
Of course, we’re sure you’d like to hear about disadvantages, but in our opinion there are none.
Following is a list of eligible student loans. If you have private / alternative education loans or credit card debt, you will not be able to consolidate those debts with your eligible education loans.
Loans that are eligible for inclusion in the Federal Consolidation Program:
- Subsidized Federal Stafford Loans
- Unsubsidized Federal Stafford Loans
- All Federal Direct Student Loans (Direct Loans)
- Federal Parent Loans for Undergraduate Students (PLUS)
- Federal Perkins Loans
- Health Professions Student Loans
- Health Education Assistance Loans (HEAL)
- Nursing Student Loans
- Federal Supplemental Loans for Students (SLS)
- Auxilliary Loans to Assist Students (ALAS)
- National Direct Student Loans (NDSL)
- Federally Insured Student Laons (FISL)
- Federal Consolidation Loans
Most Federal student loans have variable interest rates. Those rates are adjusted each year. A Federal consolidation loan has a fixed interest rate. The interest rate you pay is determined at the time of consolidation and is based on a weigthed average of the interest rates you are paying on your current student loans. As mentioned above, current rates are extremely low meaning that you will be able to “lock in” a low fixed interest rate with loan consolidation.
Finally, if you are currently delinquent or in default on your Federal student loan, loan consolidation can cure your delinquency or default status, but only if your lender offers an income sensitive repayment plan and only if you meet certain pre-requisites.
If you are ready to consolidate your student loan debt, visit eStudentLoan.com.