Federal Student Loan Consolidation

By Darren Engstrom

 

If you're thinking about federal student loan consolidation then there are a few tips that you should be aware of:

When thinking about federal student loan consolidation, it's important to take a look at a list of lenders and compare the best interest rates. The lending industry for federal student loan consolidation is very competitive and you will probably be able to find the best rates for federal student loan consolidation. Even though the prime interest rate has increased 14 times in the last two years, federal student loan consolidation rates have only increased slightly.

Here are some questions to ask yourself if you are considering federal student loan consolidation:

(courtesy of federal student loan consolidation )

Are your monthly payments manageable? If you have trouble meeting your monthly payments, have exhausted your deferment and forbearance options, and/or want to avoid default, then federal student loan consolidation may help you.

Too many monthly payments driving you crazy? If you send payments to more than one lender every month, and want the convenience of a single monthly payment, federal student loan consolidation may be right for you. With Federal Student Loan Consolidation, you will have a single lender - the U.S. Department of Education - and a single monthly payment.

What are the interest rates on your loans? If you have variable interest rates on your Federal education loans, you may want to consolidate. The interest rate for Federal Student Loan Consolidation is fixed for the life of the Consolidation Loan. The rate is based on the weighted average interest rate of the federal student loans being consolidated, rounded to the next nearest higher one-eighth of one percent and can not exceed 8.25 percent.

How much are you willing to pay over the long term? Extending the years of repayment increases the total amount you have to repay.

How many payments do you have left? If you are close to paying off your federal student loans, then federal student loan consolidation may not be the answer.

For more information on federal student loan consolidation please visit The William D. Ford Federal Direct Loan Program

 

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