What is Federal Student Loan Consolidation?
A Federal Student Loan Consolidation is a practical, student debt management tool that enables you to bundle into one single loan all of the federal student
loans you received to finance your college education. It can lower your monthly payment by as much as 60%.
When your Federal Student Loan Consolidation is issued, your lender pays off the outstanding balances of all your student loans you put into consolidation. In
essence you refinance your education debts.
In addition to simplifying record keeping and check writing chores, student loan consolidation significantly can reduce
your monthly payment burden. That’s because student loan consolidation allows you to stretch your repayment period from the standard 10 years to as much as 30
years, depending on the amount of your education debts. The lower payment means that you will have money available to meet other household expenses, including car
payments, child care, and other career-related necessities.
Extending the repayment period increases your total interest payments because you will make smaller payments over a longer period of time. However, there are no
prepayment penalties for accelerating the payback of your Federal
Student Loan Consolidation.
Why should I consolidate my education loans?
- If your student loans are with various lenders or student loan servicers, student loan
consolidation will eliminate the need to make multiple monthly payments. You only will have one monthly check to write!
- Federal Stafford loans Subsidized and Unsubsidized loans carry a variable interest
rate that is annually adjusted. Federal Student Loan Consolidations are fixed for the life of the loan.
- For borrowers submitting a student loan consolidation application during their grace period, the interest rate of the Federal Student Loan
Consolidation will be based on the rate reported by your lender, resulting in a lower fixed rate for some borrowers.
- Under Federal Student Loan Consolidation the federal government will continue to honor interest subsidy benefits for any subsidized FFELP or direct loans
included in the consolidation.
- If you are having trouble covering all your regular household expenses, including your rent or mortgage payments, car loan installments, food bills, and
utility payments, consolidating your student loans may help ease the pressure on your monthly budget. Student Loan Consolidation can reduce your monthly payment
amount by anywhere from 10 percent to 40 percent, depending on your loan balance, the length of the payback period, and the interest rate on your Federal Student
Loan consolidation.
- A smaller payment on your student loans may be necessary if you are trying to get a home mortgage, save the seed capital needed to start a small business, or
help a family member go to college.
- Finally, if your income tends to fluctuate, or you have another worthwhile use for your money, then student loan consolidation could be the answer for you.
Is there any application fee for student loan consolidation?
No. By law, lenders cannot charge an application fee for Federal Student Loan Consolidation. This law also applies to the loans guarantor.
What are you waiting for? Apply now!
No-hassle application. Only from NextStudent.
All student loan borrowers, even parents, can consolidate with the NextStudent Federal Consolidation program. There are no credit checks, you don't need to know
the details of your current student loan portfolio, and you don’t need a co-signer.
You can apply online or call a NextStudent Education Finance Advisor at (800)
299-4639
