Student Loan Consolidation Has Another Advantage

Category: Finance.

Federal Student Loans are easier to pay and brings less long term hassle and panic if these debts are converted into Federal Student Loan Consolidation. Doing so has many advantages.

Consolidating your loan means that all the different types of student loans you acquired will be combined in one loan. Since federal student loan interest rates are currently at their lowest, loan consolidation actually means that the interest rate used for the whole duration of your loan is fixed. It all depends on you, really. However, there are also disadvantages when one avails student loan consolidations. If you think it would take you a longer time to pay off your student loan, you will then consequently pay more interest during the course of your whole loan repayment. You will be able to pay the student loan off faster than when you did not consolidate your loans. However, since in consolidating your loans, there are really no penalties in prepayment and if you continually pay the same amount of payments before actually consolidating your loans, the interest you will incur would not increase.

One category you could take into consideration regarding federal student loans is availing of the FFEL consolidation loan. Through the FFEL loan consolidation program, only one payment is made each month. This loan program helps any borrower via multiple repayment schedules. In the FFEL program, the student loan consolidation you will be acquiring will be made by a commercial lender, after which credit bureaus will tell you that you already have a zero balance in your account, after doing so you will then sign a fresh promissory note indicating that you will have a new interest rate and schedule of repayment. Again, refinancing student loans depends on the borrower. But, in order to avail of the FFEL student loan consolidation, you must currently be in repayment on the loan you defaulted or that you have been able to make at least three voluntary and on time monthly payments in full.

The United States Department of Education does not in any way allow any borrower to refinance a student loan consolidation. Another advantage when one avails of student loan consolidation is that there are no fees or charges incurred. But if in case a borrower has an additional federal loan that is not originally included in the loan consolidation, these debts may then be added and calculated again into a another Federal Consolidation Loan. The United States Department of Education does not in any way make charges or collects any fees to any borrower who avails of the student loan consolidation. Student loan consolidation has another advantage. So now that the details and advantages have been outlined, the following is a basic list of some student loans that are eligible to be consolidated: PERK- Federal Perkins Loans, formerly Nations Defense/ National Direct Student Loans( NDSL) , PLUS- Federal PLUS( Parent) Loans, SCON- Subsidized Federal Consolidation Loans, UCON- Unsubsidized Federal Consolidation Loans, SLS- Federal Supplemental Loans for Students( formerly Auxiliary Loans to Assist Students( ALAS) and Student PLUS Loans) , SS- Subsidized Federal Stafford Loans& Guaranteed Student Loans( GSL) , DSS- Direct Subsidized Stafford Loans, DUS- Direct Unsubsidized Stafford Loans, DPLUS- Direct PLUS Loans, DUCON- Direct Unsubsidized Consolidation Loan, including Direct PLUS Consolidation Loans.

A borrower is still entitled to avail of the same Federal benefits. And being it a federal program, a borrower is more than welcome and is entitled to various benefits such as deferment, interest that is tax deductible and forbearance. This is because student loan consolidation is a federal program. Plus, the student loan is guaranteed by the government and is insured federally.

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